Gr.Hydrabad Mun.Corp vs M.Prabhakar Rao

M. Prabhakar Rao ...... Respondent

J U D G M E N T

A. K. PATNAIK, J.

Delay condoned.

2. Leave granted.

3. This is an appeal against the order dated 18.02.2010

of the Division Bench of the Andhra Pradesh High Court

dismissing Writ Petition No.1564 of 2010 of the appellant

against the order dated 18.08.2009 of the Andhra Pradesh

Administrative Tribunal, Hyderabad, in O.A. No.7377 of

2008.

2 4. The facts briefly are that the respondent was working

as a Bill Collector in the Municipal Corporation of

Hyderabad. On 19.05.2007, he was placed under

suspension by the Commissioner & Special Officer,

Municipal Corporation of Hyderabad (for short `the

competent authority), as it was reported by the Deputy

Director, Anti-Corruption Bureau, C.I.U. and City Range

Hyderabad, that he had demanded Rs.2,000/- from the

complainant, M.R. Srinivas, for assessment of his house

and had accepted the bribe. On 28.06.2001, the competent

authority revoked the suspension of the respondent and

reinstated him in service without prejudice to the

prosecution pending against him and posted him in a non-

focal post. The respondent was thereafter prosecuted, but

acquitted by the trial court. The acquittal of the respondent

was challenged by the State in the Andhra Pradesh High

Court in Criminal Appeal No. 2548 of 2004, but by

judgment dated 06.12.2004, the High Court dismissed the

appeal.

5. The respondent then made a representation seeking

back-wages for the suspension period and other

3

consequential benefits, but the same was rejected by Memo

dated 01.07.2005. The respondent filed O.A. No.3627 of

2005 before the Andhra Pradesh Administrative Tribunal,

Hyderabad (for short `the Tribunal') against such rejection of

back-wages for the suspension period and by order dated

13.11.2006, the Tribunal set aside the Memo dated

01.07.2005 and remitted the matter to the authorities with

a direction to re-examine the entire issue with reference to

the rules and pass appropriate orders duly giving an

opportunity to the respondent. The competent authority in

his order dated 17.11.2008 re-examined the issue and took

the view that the suspension of the respondent cannot be

regarded as wholly unjustified and hence the back-wages

and consequential benefits for the suspension period cannot

be paid to the respondent. Aggrieved, the respondent filed

O.A. No.7377 of 2008 before the Tribunal and by order

dated 18.08.2009, the Tribunal allowed the O.A. and set

aside the order dated 17.11.2008 of the competent authority

and declared that the respondent was entitled for treating

the period of suspension as on duty and for release of all

consequential benefits. The appellant challenged the order

4

of the Tribunal before the High Court in Writ Petition No.

1564 of 2010 but by the impugned order, the High Court

dismissed the Writ Petition.

6. Mrs. D. Bharathi Reddy, learned counsel for the

appellant, submitted that under the F.R. 54-B of the Andhra

Pradesh Fundamental Rules (for short `F.R. 54-B'), which is

applicable to employees of the Municipal Corporation of

Hyderabad, the competent authority has been vested with

the power to pass an order as to how the period of

suspension would be treated. She submitted that sub-rule

(3) of F.R. 54-B provides that where the competent authority

is of the opinion that the suspension was wholly unjustified,

an employee would be paid full pay and allowances to which

he would have been entitled, had he not been suspended.

She submitted that in the facts of the present case, the

respondent had been placed under suspension for accepting

a bribe from the complainant and a charge sheet was filed

in the court against him, but he was acquitted by the trial

court and the High Court has sustained the acquittal of the

respondent only because the prosecution witnesses had

turned hostile and did not support the prosecution version

5

that the respondent was paid Rs.2,000/- towards illegal

gratification and on these facts, the competent authority

had rightly taken the view that the suspension cannot be

regarded as wholly unjustified. She submitted that the

orders passed by the Tribunal and the High Court,

therefore, should be set aside.

7. Mr. Naveen R. Nath, learned counsel for the

respondent, on the other hand, submitted that the High

Court, after going through the evidence adduced by the

prosecution and the finding of the Tribunal, did not find any

compelling reason to interfere with the judgment of the trial

court acquitting the respondent. He submitted that it will

be clear from the judgments of the trial court and the High

Court that the suspension of the respondent was wholly

unjustified and yet the competent authority took the

erroneous view in the order dated 17.11.2008 that the

suspension of the respondent cannot be regarded as

unjustified. He submitted that the Tribunal has rightly held

that the suspension of the appellant was unjustified and the

High Court has held in the impugned order that the order of

the Tribunal needs no interference.

6 8. Sub-rule (3) of F.R. 54-B is extracted hereinbelow:

"(3) Where the authority competent to

order reinstatement is of the opinion that

the suspension was wholly unjustified, the

Government servant shall subject to the

provisions of sub-rule (8), be paid the full

pay and allowances to which he would

have been entitled, had he not been

suspended:

Provided that where such authority is of

the opinion that the termination of the

proceedings instituted against the

Government servant had been delayed due

to reasons directly attributable to the

Government servant, it may after giving

him an opportunity to make his

representation [within sixty days from the

date on which communication to this

regard is served on him] and after

considering the representation, if any

submitted by him, direct for reasons to be

recorded in writing, that the Government

servant shall be paid for the period of such

delay [only such amount (not being the

whole) of such pay and allowances as it

may determine]."

Sub-rule (3) of F.R. 54-B extracted above, thus, vests power

on the authority competent to order reinstatement to form

an opinion whether suspension of a Government servant

was wholly unjustified and if, in his opinion, the suspension

of such Government servant is wholly unjustified, such

Government servant will be paid full pay and allowances to

7

which he would have been entitled, had he not been

suspended. The proviso to sub-rule (3) of F.R. 54-B,

however, states that where such authority is of the opinion

that the termination of the proceedings instituted against

the Government servant had been delayed due to reasons

directly attributable to the Government servant then the

Government servant shall be paid for the period of such

delay only such amount (not being the whole) of such pay

and allowances as it may determine. In other words, even

where the competent authority is of the opinion that the

suspension was wholly unjustified, the Government servant

may still not be entitled to be paid the whole pay and

allowances, but may be paid such pay and allowances as

may be determined by the competent authority.

9. The rationale, on which sub-rule (3) of F.R. 54-B is

based, is that during the period of suspension an employee

does not work and, therefore, he is not entitled to any pay

unless after the termination of the disciplinary proceedings

or the criminal proceedings the competent authority is of

the opinion that the suspension of the employee was wholly

unjustified. This rationale has been explained in clear and

8

lucid language by a three-Judge Bench of this Court in

Union of India & Ors. v. K.V. Jankiraman & Ors. [(1991) 4

SCC 109]. At page 121 in Para 26 P.B. Sawant, J, writing

the judgment for the Court in the aforesaid case further

observed:

"26. ....... However, there may be cases where

the proceedings, whether disciplinary or

criminal, are, for example, delayed at the

instance of the employee or the clearance in

the disciplinary proceedings or acquittal in the

criminal proceedings is with benefit of doubt or

on account of non-availability of evidence due

to the acts attributable to the employee etc. In

such circumstances, the concerned authorities

must be vested with the power to decide

whether the employee at all deserves any

salary for the intervening period and if he

does, the extent to which he deserves it. Life

being complex, it is not possible to anticipate

and enumerate exhaustively all the

circumstances under which such

consideration may become necessary. To

ignore, however, such circumstances when

they exist and lay down an inflexible rule that

in every case when an employee is exonerated

in disciplinary/criminal proceedings he should

be entitled to all salary for the intervening

period is to undermine discipline in the

administration and jeopardize public interests.

...."

It will be clear from what this Court has held in Union of

India & Ors. v. K.V. Jankiraman & Ors. (supra) that even in

cases where acquittal in the criminal proceedings is on

9

account of non-availability of evidence, the concerned

authorities must be vested with the power to decide whether

the employee at all deserves any salary for the intervening

period, and if he does, the extent to which deserves it. In

the aforesaid case, this Court has also held that this power

is vested in the competent authority with a view to ensure

that discipline in administration is not undermined and

public interest is not jeopardized and it is not possible to lay

down an inflexible rule that in every case where an

employee is exonerated in the disciplinary/criminal

proceedings he should be entitled to all salary during the

period of suspension and the decision has to be taken by

the competent authority on the facts and circumstances of

each case.

10. In the facts of the present case, the Deputy Director,

Anti-Corruption Bureau, C.I.U. and City Range Hyderabad,

had reported that the respondent had taken Rs.2,000/-

from the complainant, M.R. Srinivas, for assessment of his

house and had accepted Rs.2000/- from him on 14.05.1997

at his house and that the bribe amount was recovered from

the possession of the respondent and that the test of right

10

hand fingers and shirt pocket of respondent was positive

and that he was arrested and released on bail and on such

report, the respondent was placed under suspension with

immediate effect by order dated 19.05.1997. The trial court,

however, acquitted the respondent of the charges and in the

criminal appeal of the State, the High Court sustained the

acquittal of the respondent and dismissed the criminal

appeal. The reasons for sustaining the acquittal of the

respondent given by the High Court in its judgment dated

06.12.2004 in the criminal appeal are quoted hereinbelow:

"The story of the prosecution is that the

amount that was recovered from the pocket

of A.1 was paid by PW.1 on demand made

by A.1 and A.2 as illegal gratification and

was accepted by A.1. The prosecution in

order to prove the guilt of the respondents

examined PWs 1 to 8 and marked Exs. P.1

to P.13 and M.Os. 1 to 11. The lower court

after considering the evidence acquitted the

respondents by holding that the prosecution

failed to prove that the amount recovered

from A.1 was taken by him as illegal

gratification. PWs1 and 2 made a complaint

to ACB officials complaining that A.1 and

A.2 demanded illegal gratification for

reducing the property tax and it was

accepted by them when tainted notes were

given. But unfortunately, PWs 1 and 2

turned hostile and did not support the

prosecution version that they paid amount

of Rs.2,000/- to A.1 towards illegal

11

gratification. Though the recovery of the

amount was proved by the prosecution, the

purpose for which the amount was paid

could not be proved, therefore, the lower

court rightly came to a conclusion that

there is a doubt whether the amount that

was paid to A.1 was towards illegal

gratification. After carefully going through

the evidence adduced by the prosecution

and the findings of the lower court, I do not

find any compelling reasons to interfere with

the judgment of the lower court regarding

the acquittal of both the respondents.

There are no grounds to interfere with the

judgment of the lower court."

Thus, the High Court found that PW-1, who made the

complaint that the respondent had demanded illegal

gratification for reducing the property tax, turned hostile

and did not support the prosecution version that he had

paid Rs.2,000/- to the respondent towards illegal

gratification. The High Court also held that the recovery of

the amount was proved by the prosecution, but the purpose

for which the amount was paid could not be proved and

therefore the trial court rightly came to the conclusion that

there is a doubt whether the amount that was paid to the

respondent was towards illegal gratification. On these

materials, the competent authority has formed the opinion

in his order dated 17.11.2008 that the suspension of the

12

respondent cannot be regarded as wholly unjustified and

has declined to grant any salary and allowance to the

respondent during the period of suspension. This opinion of

the competent authority was a possible view on the

materials which the competent authority could form in the

facts and circumstances of the case while passing an order

in exercise of his powers under sub-rule (3) of F.R. 54-B,

declining to allow the salary and allowances of the

respondent for the period of suspension.

11. Yet, the Tribunal has found fault with the order dated

17.11.2008 of the competent authority and has held that

the suspension of the respondent was unjustified. The

reasons given by the Tribunal in its order are that the

prosecution has failed to prove the case beyond reasonable

doubt about the demand and acceptance of the bribe and

the criminal court has acquitted the respondent and it was

open for the authorities to proceed against the respondent

departmentally, but no such departmental proceedings were

initiated to prove the misconduct of the respondent. The

approach of the Tribunal, in our considered opinion, was

not correct. Sub-rule (3) of F.R. 54-B does not state that in

13

case of acquittal in a criminal proceedings the employee is

entitled to his salary and allowances for the period of

suspension. Sub-rule (3) of F.R. 54-B also does not state

that in such case of acquittal the employee would be

entitled to his salary and allowances for the period of

suspension unless the charge of misconduct against him is

proved in the disciplinary proceedings. Sub-rule (3) of F.R.

54-B vests power in the competent authority to order that

the employee will be paid the full pay and allowances for the

period of suspension if he is of the opinion that the

suspension of the employee was wholly unjustified. Hence,

even where the employee is acquitted of the charges in the

criminal trial for lack of evidence or otherwise, it is for the

competent authority to form its opinion whether the

suspension of the employee was wholly unjustified and so

long as such opinion of the competent authority was a

possible view in the facts and circumstances of the case and

on the materials before him, such opinion of the competent

authority would not be interfered by the Tribunal or the

Court.

14 12. In the result, we allow this appeal and set-aside the

order of the Tribunal and the impugned order of the High

Court and dismiss the original application filed by the

respondent before the Tribunal. There shall be no order as

to costs.

..........................J.

(R.V. Raveendran)

..........................J.

(A. K. Patnaik)

New Delhi,

July 28, 2011.