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.

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  

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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  

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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  

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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.  

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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  

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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  

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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  

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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  

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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  

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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  

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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  

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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.

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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.     

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