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

                                                           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.

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