1. Bank employee suspended for financial misconduct — criminal prosecution pending — challenge to suspension order on grounds of absence of departmental enquiry. (Para 1 , 2 )
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1999 Supreme(SC) 922
SUPREME COURT OF INDIA
R.P.Sethi : Sujata V.Manohar
State Bank Of India
Versus
Rattan Singh
Case No. : 540 of 1998
Date of Decision : 8/24/99
Advocates Appeared: Arora H.C. : Keshwani R.M. : Mathur Ashok : Sundaravaradan R.
A bank is entitled to suspend an employee under paragraph 521(10)(b) of the Sastri Award pending an enquiry or initiation of an enquiry, and while a criminal prosecution is pending against the employee.
Headnote:
SUSPENSION OF BANK EMPLOYEE - SASTRI AWARD, PARAGRAPH 521(10)(B) - INITIATION OF DEPARTMENTAL ENQUIRY - CRIMINAL PROSECUTION PENDING - SUBSISTENCE ALLOWANCE - DETERMINATION.
Fact of the Case:
The respondent, a clerk-cum-cashier in the State Bank of India, was suspended for alleged misconduct, including passing a cheque against a non-existent account. He challenged the suspension order, arguing that no departmental enquiry had been initiated and he had been suspended for more than three years.
Finding of the Court:
The Court held that the suspension order was valid as it was issued under paragraph 521(10)(b) of the Sastri Award, which allows for suspension pending an enquiry or initiation of an enquiry. The Court also held that the bank was entitled to suspend the respondent while a criminal prosecution was pending against him.
Issues: 1. Whether the suspension order was valid under paragraph 521(10)(b) of the Sastri Award? 2. Whether the bank was entitled to suspend the respondent while a criminal prosecution was pending against him? 3. Whether the respondent was entitled to subsistence allowance during suspension?
Ratio Decidendi: 1. Paragraph 521(10)(b) of the Sastri Award allows for suspension pending an enquiry or initiation of an enquiry. The words "or initiation of such enquiry" were added to the sub-clause pursuant to the Bipartite Settlement dated 17/9/1984. 2. When a criminal prosecution on serious charges is pending against an employee, the bank is entitled to suspend him. 3. The claim of the respondent to subsistence allowance where a criminal prosecution is pending against him will have to be determined by the appellant-bank de hors clause 5 and in accordance with law and in the light of the Sastri Award, the Desai Award as also the Bipartite Settlement and any rules or regulations of the appellant-bank.
Final Decision: The appeal was allowed, the impugned judgment and order of the Division Bench of the High Court was set aside, and the writ petition was dismissed.
Legal Category Hierarchy
Table of Contents
2. Suspension illegal — absence of departmental enquiry — prolonged period of suspension. (Para 2 )
3. Suspension valid under Bipartite Settlement and Sastri Award where criminal prosecution for serious charges is pending; subsistence allowance determined by bank rules and awards. (Para 3 , 4 , 6 , 7 )
4. Bank entitled to suspend employee when criminal prosecution on serious charges is pending. (Para 5 )
5. Appeal allowed — impugned judgment set aside — writ petition dismissed. (Para 8 )
6. Can a bank employee be suspended if a criminal prosecution is pending but no departmental enquiry has been initiated?
Yes. Under the Sastri Award and Bipartite Settlement, a bank is entitled to suspend an employee when a criminal prosecution on serious charges is pending, even if a departmental enquiry has not been initiated. (Para 3 , 4 , 5 )
7. How is subsistence allowance determined when an investigation is conducted by an outside agency and criminal prosecution is pending?
In such cases, clauses dealing with internal investigations do not apply. The allowance must be determined by the bank in accordance with the Sastri Award, Desai Award, Bipartite Settlement, bank rules, or the discretion of the disciplinary authority. (Para 6 )
8. Does the lapse of a significant amount of time during suspension automatically entitle an employee to return to a sensitive post?
No. The mere fact that several years have elapsed is not ground to allow an employee back to a sensitive post unless they have been exonerated. (Para 5 )
SUJATA V.MANOHAR, J.
(1) THE respondent was a clerk-cum-cashier in the Ranchi branch of the State Bank of India it the material time. The appellant-State Bank of India, by an order dated 23/7/1993, placed the respondent under suspension. The order of suspension stated as under:
" 1. Certain acts of gross misconduct on your part have been brought to the notice of the undersigned. It has, therefore, been decided to place you under suspension from bank service with immediate effect in terms of para. 521(10)(b) of the Sastri Award as retained in the Desai Award.
2. During the period of suspension, you are being attached to Hatia branch to draw your subsistence allowance, which shall be paid in terms of provisions of the Sastri Award as retained in the Desai Award and as modified in para. 5 of XVII of the Memorandum of Bipartite Settlement dated Septembers, 1983."
According to the appellant, the order of suspension was a result of the respondent having dishonestly passed and got an amount of Rs. 3 lakhs against a cheque dated 19/7/1993, in respect of an alleged current account in the name of K. P. Sharma which current account was not existing. An FIR was lodged in respect of the said incident on 30/7/1993, after the appellant bank collected the relevant documents along with other evidence. Thereafter, the investigation was carried out by the CBI and a criminal prosecution has also been launched, inter alia, against the respondent, which is still pending.
(2) ON 3/7/1996, the respondent filed a writ petition challenging the order of suspension dated 23/7/1993. He contended that no departmental enquiry had been initiated and the respondent was kept under suspension for more than three years and hence, the order of suspension was illegal. This writ petition was dismissed by the learned single Judge. However, in appeal, the Division Bench of the High Court, by its impugned judgment, set aside the order of the learned single Judge and allowed the writ petition of the respondent. Hence, the present appeal has been filed by the appellant-bank.
(3) THE order of suspension itself states that the order has been issued in terms of paragraph 521(10)(b) of the Sastri Award as retained in the Desai Award. The relevant portions of paragraph 521 of the Sastri Award are as follows:
"PARA, 521(2)(a) When in the opinion of the management an employee has committed an offence, unless he be otherwise prosecuted, the bank may take steps to prosecute him or get him prosecuted; and in such a case he may also be suspended. 10(b) Pending such inquiry or initiation of such inquiry he may be suspended, but if on the conclusion of the enquiry it is decided to take no action against him he shall be deemed to have been on duty and shall be entitled to the full wages and allowances and to all other privileges for the period of suspension, and if some punishment other than dismissal is inflicted the whole or a part of the period of suspension, may, at the discretion of the management, be treated as on duty with the right to a corresponding portion of the wages, allowance, etc."
(4) THE words "or initiation of such inquiry" in clause (10)(b) of paragraph 521 have been added to the said sub-clause pursuant to the Bipartite Settlement dated 17/9/1984.
(5) THEREFORE, the suspension of the respondent by the order of July 23, 1993, can be considered as both under paragraph 521(10)(b) as also under paragraph 521(2)(a), since at the relevant time, both a departmental enquiry as well as a criminal prosecution were under contemplation. Thereafter, in view of the pendency of the criminal prosecution, the appellant did not initiate a departmental enquiry. The order of suspension, therefore, cannot be faulted looking to the provisions set out above. When a criminal prosecution on serious charges is pending against the respondent, the bank is entitled to suspend him. In this connection, our attention has been drawn to a
