Shri Mannu Kumar vs State Bank Of India And Ors.
2006 Latest Caselaw 70 Del

JUDGMENT

S. Ravindra Bhat, J.

1. The petitioner in these proceedings under Article 226 of the Constitution, is aggrieved by an order issued by the first respondent, State Bank of India (hereafter called the Bank) dated 19.7.1194 dismissing him from the services.

2. The petitioner had joined services of the bank, as a clerk, in 1969; he was promoted as Officer, Grade I, in 1978, and further promoted as Officer, Grade-I, with effect from 1.9.1979. Whilst in service, he was placed under suspension, by the bank, on 31-12-1985 since he had been implicated in criminal proceedings, initiated pursuant to a first information report, alleging that he had committed an offence under Section 498A, read with Section 306, Indian Penal Code. The Bank later revoked the suspension order on 17-3-1991.

3. The petitioner was convicted in the criminal proceedings, on 20-9-1993. The bank, invoking its power to dismiss an employee were convicted of criminal charges, under Section 10(1)(b)(i) of the Banking Regulation Act, and Rule 68(7)(i) of the State Bank of India Supervising Staff Service Rules, dismissed the petitioner from its services. The petitioner approached this court, impugning the order of dismissal.

4. During the pendancy of these proceedings, the petitioner had appealed to this Court. By judgment and order dated 16-7-2001, the conviction and sentence were set aside, and the petitioner was acquitted of the charges. He therefore, represented to the bank for re-instatement. The bank, by its communication dated 6-6-2002, accepted the request, to reinstate the petitioner; it however, denied the benefit of salary and emoluments for the period 3-8-1994, till the petitioner joined the duties. He was also asked to refund the balance of provident fund, of Rs. 1,36, 071/- with interest as applicable to provident fund amounts, and the gratuity amount of Rs. 1,00,000/- along with up to date interest at commercial rates. The petitioner filed CM 12953/2002, bringing to the notice of the court, the banks order, and seeking appropriate orders. This court had permitted him to rejoin duties, without prejudice to his rights.

5. In its reply to the application, the bank averred that the petitioner did not rejoin, on the ground of some medical problems; it alleges that he remained unauthorizedly absent till 29-11-2002, in spite of the offer of reinstatement. He remained on leave, substantially for the period 1-12-2002 to 15-1-05. It is also alleged that at his request, the bank posted him from Keri to Delhi, and he is working at the Azadpur Branch.

6. Counsel for the petitioner confined his submissions to the claim for full salary for the petitioner was out of employment, for the period 1994 to 2002. It was submitted that with the acquittal of the petitioner, the disability if any, against his name, stood effaced; he is deemed in law to have never been culpable. Counsel for the petitioner relied upon the decision of the Supreme Court, reported as Workmen, U.P. State Electricity Board v. Upper Ganges Valley Electricity Supply Co.,(1966) 1 LLJ 730; and Dy. Director of Collegiate Education v. Nagoor Meera AIR 1994 SC 1364 in support of the contention that whenever an employee is terminated on ground of conviction in criminal proceedings, is eventually acquitted of charges, by an appellate court, the employer has to pay full back wages.

7. Learned counsel for the Bank, on the other hand contended that the petitioner had been validly terminated from employment, on account of his conviction, as per Regulations of the Bank. That action could not be faulted, in view of the express provisions of the Banking Regulation Act, and the SBI Staff Regulations. Therefore, upon his acquittal, by the Appellate court, the employer after fairly considering the record, and all relevant materials, decided to reinstate him from services, but without back-wages. Learned Counsel relied upon the decisions reported as Ranchodji Chaturji Thakore v.- Superintendent Engineer, Gujarat Electricity Board and Union of India v. Jaipal Singh, , to say that there is no invariable rule that a terminated employee, reinstated after his acquittal has to be granted backwages; each case would depend upon the facts.

8. The narrow controversy in this case is whether the denial of backwages for the eight year period, between 1994 and 2002, to the petitioner, is illegal and arbitrary.

9. In the larger bench decision, in Workmen, U.P. State Electricity Board, there is undoubtedly a passage which suggests that managements do have an obligation to consider the alternative of paying backwages, in the event of an employee securing bail. The Supreme Court, had observed as follows:

5. In awarding half emoluments up to his acquittal the Tribunal apparently thinks that a disability attached to Sharma and that there was justification. for reducing the amount In our judgment the Tribunal is in error in so thinking. The termination of Sharmas service, in the events that happened, was proved to be entirely wrong. After his appeal was admitted and bail was granted to him there was no final judgment against him. The Company had only two courses open to it. Either Sharma should have been allowed to continue in his post or his service could have been terminated after proper charge and enquiry. By not following either course, and resisting his efforts to get reinstatement the termination of Sharmas service became illegal from the beginning. Sharma is, therefore, entitled to receive his full emoluments from March 29, 1957 right up to May 5, 1959, on which date he was not taken over by the Board on the transfer of the undertaking

The reasoning of the Supreme Court, as is evident from the above passage, is on the premise that the management was under a duty to re-instate the employee, the moment he was admitted to bail; the other option being to conduct a departmental proceeding to examine the charges, and take appropriate disciplinary action, in the event the misconduct was established.

10.In my opinion, the situation here is different. Regulation 68(7) (i) enables the Bank to, irrespective of other options, take action, and dismiss an employee convicted by a criminal court. Section 10(1)(b)(i) of the Banking Regulation Act prohibits a bank from employing, or continue to employ, a person convicted by a criminal court of an offence involving moral turpitude. Although these provisions do not oblige the employer Bank to reinstate the employee, it goes without saying that the employer, as a reasonable public body, would have to fairly review its decision, if the employee is ultimately acquitted. There is nothing in the decision of the Supreme Court, in the Workmen, U.P. State Electricity Board, case, to suggest such statutory obligation on the part of the employer, to take action, against an employee convicted of criminal charges. The existence of such condition, in my opinion implies that so long as the disability arising out of conviction, attaches to the person concerned, the employer cannot continue him, or reinstate him into its services.

11. In Krishnakant Raghunath Bibhavnekar v. State of Maharashtra, , the Supreme Court explained the right of an employee to claim backwages, after reinstatement, upon being acquitted, in the following manner:

If the conduct alleged is the foundation for prosecution, though it may end in acquittal on appreciation or lack of sufficient evidence, the question emerges whether the government servant prosecuted for commission of defalcation of public funds and fabrication of the records, though culminated into acquittal, is entitled to be reinstated with consequential benefits. In our considered view this grant of consequential benefits with all back wages etc. cannot be as a matter of course. We think that it would be deleterious to the maintenance of the discipline if a person suspended on valid considerations is given full back wages as a matter of course on his acquittal.

In its later decision in Hukmi Chand v. Jhabua Coop. Central Bank Ltd., , the court again reiterated the same position, in the following terms:

The second contention of the appellant relates to Rule 49, sub-rule (ii) which provides that if ultimately the sentence awarded by a lower court is set aside by a superior court and the employee is acquitted, he is required to be reinstated in service. The appellant contends that this rule further provides that he is to be reinstated without any back wages unless otherwise stated in the order of reinstatement. This, according to the appellant, is a fetter on the power of the employer to award back wages to the employee and hence this rule is arbitrary. He contends that if the employee is reinstated, there should be provision for grant of back wages also. In the absence of such a provision, according to him, sub-rule (ii) is arbitrary. We fail to see any such fetter as contended by the appellant. Under sub-rule (ii), there is a clear implied power to order back wages if the employer considers it appropriate looking to the facts and circumstances of a given case. All that the rule provides is that the order must state that such back wages are being granted. In the absence of an order specifying the grant of back wages, the reinstatement will not automatically entitle an employee to back wages. The right to reinstatement on acquittal, therefore, does not carry with it, by necessary implication, a right to back wages under Rule 49(ii). But the employer has the discretion to grant back wages. Such a fetter if at all it is a fetter, cannot be considered as arbitrary, in view of the fact that the termination of services under sub-rule (i) of Rule 49 is on conviction. During the pendency of an appeal, the conviction is not obliterated. However, on acquittal, sub-rule (ii) provides for reinstatement. The grant of back wages, in these circumstances, will obviously depend upon the facts and circumstances of each case, especially because in the interregnum, the employee does not work with the employer on account of a valid termination of service

The same position was taken in the two judgments cited by the Bank, namely Ranchodji Chaturji Thakore v. Superintendent Engineer, Gujarat Electricity Board and Union of India v. Jaipal Singh, .

12. The correct position therefore, appears to be that the grant of back wages depends upon the facts and circumstances of each case, and a circumstance which has to be kept in mind is that the employee does not work with the employer on account of a valid termination of service. The right to claim reinstatement, if one can term it to be so, arises only after the superior or appellate court acquits the employee. Till then, the disability arising on account of the employee having been convicted, remains; he cannot claim reinstatement. The denial of arrears of salary and allowances to the petitioner, for the duration he was out of employment on account of his conviction on criminal charges, therefore, is neither arbitrary nor illegal.

13. In view of the above conclusions, and taking into consideration that the petitioner joined the duties, which resulted in the principal grievance having been redressed, the writ petition, and all pending interlocutory applications are dismissed, with no order as to costs.