Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 6014 OF 2011
(Arising out of S.L.P. (C) No. 22723 of 2010)
The Greater Hyderabad Municipal Corporation ... Appellant
Versus
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.
