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SUPREME COURT OF INDIA
S.S. Nijjar and Ranjan Gogoi, JJ.
STATE BANK OF INDIA AND ANOTHER - Appellants;
Versus
MOHAMMED ABDUL RAHIM - Respondent.
Civil Appeal No. 5472 of 2013
Decided on : July 15, 2013
(b) Banking Regulation Act, 1949 – Section 10(1)(b)(i) – Bar on the banks employing a person convicted on criminal charges – Respondent not entitled to back wages for the period between conviction and acquittal – At best entitled to back wages for the date since he made his claim for reinstatement. (Para 10, 11)
(2007) 1 SCC 324 – Relied upon
(1996) 11 SCC 603; (2004) 1 SCC 121; (2005) 8 SCC 747 – Distinguished
Facts of the case:
The respondent was convicted under Section 498A IPC and Section 4 of the Dowry Prohibition Act, 1961 following which he was discharged.
His appeal against conviction was allowed on the ground that prosecution had failed to prove its case.
Respondent was reinstated in service but back wages were not given.
High Court allowed the back wages.
Finding of the Court:
Respondent is not entitled to back wages for the period from conviction to acquittal.
Key Points: - The judgment holds that back wages are not admissible for the period from conviction to acquittal, under the Banking Regulation Act, 1949, Section 10(1)(b)(i). (!) - A bank may initiate a departmental proceeding on the same facts as a criminal case and act independently of the criminal case; if not done, the bank is bound by the criminal judgment, and acquittal can lead to reinstatement but back wages for the conviction period may be denied. (!) (!) - Upon acquittal, the substratum of the dismissal/discharge ceases to exist and reinstatement is due, but back wages are limited to the period after the acquittal demand unless barred by statutory provisions. (!) (!) - The period for which back wages may be payable is at best from the date of the claim for reinstatement (if any), with the statutory bar applying to wages during the conviction period. (!) - The Sastry Award provisions do not alter the basic principle that an employer may or may not initiate departmental proceedings; if acquitted and no departmental action is taken, the acquittal finality affects reinstatement but not automatic back wages. (!) (!)
JUDGMENT
Ranjan Gogoi, J.
1. Leave granted.
2. This appeal is directed against the judgment and order dated 22.02.2012 passed by the Division Bench of the High Court of Judicature at Madras, Madurai Bench in Writ Appeal (MD) No. 1715 of 2011, affirming the order passed by the learned Single Judge in a writ petition filed by the writ Petitioner i.e. The Respondent in the present appeal. The High Court, for the reasons assigned, has taken the view that the Respondent/writ Petitioner was entitled to the benefit of back wages for the period that he had remained out of employment following his conviction in a criminal charge.
3. The relevant facts are as hereunder:
The Respondent/writ Petitioner while working as a Assistant (Accounts) in the State Bank of India at Thanjavur Branch was convicted of the offences under Section 498Aof the Indian Penal Code, 1860 (for short "the Indian Penal Code") and Section 4 of the Dowry Prohibition Act, 1961 on 03.11.1997. Following the aforesaid conviction, he was discharged from the service by an order dated 07.06.1999. Aggrieved by the conviction, the Respondent had filed an appeal which was allowed by the learned Sessions Judge, Ramanathapuram by order dated 22.02.2002. The order of acquittal, on a plain reading, appears to be based on the finding that the prosecution had failed to prove its case beyond reasonable doubt.
4. Thereafter, on a demand being raised, the Respondent was reinstated in service on 07.11.2002. However, back wages for the period that he had remained out of service was not granted. Aggrieved by the aforesaid action of the Appellant-bank, the Respondent filed the writ petition (W.P. No. 8079 of 2005) in question seeking the relief of back wages for the period he was kept out of employment i.e. From 07.06.1999 (date of discharge from service) upto 07.11.2002 (date of reinstatement). As already-noticed, the learned Single Judge of the High Court having granted the aforesaid relief which was affirmed in the Letters Patent Appeal filed by the Appellant herein, this appeal, by special leave under Article 136 of the Constitution, has been filed.
5. We have heard learned Counsel for the parties.
6. Learned Counsel for the Appellant has drawn the attention of the Court to the provisions of Section 10(1)(b)(i) of the Banking Regulation Act, 1949 (for short "the Act") and contends that there was a legal bar for the Appellant-bank to continue to employ the Respondent after his conviction by the criminal court for the offences under Section 498A Indian Penal Code and Section 4 of the Dowry Prohibition Act, 1961. Learned Counsel has also placed reliance on several judgments of this Court to demonstrate that grant of back wages may not be permissible in a situation where an employee, who is dismissed from service on the basis of an order of conviction in a criminal case, is reinstated in service following the reversal of the conviction. Specifically the judgments of this Court in Ranchhodji Chaturji Thakore v. Superintendent Engineer, Gujarat Electricity Board, Himmatnagar (Gujarat) and Anr. : (1996) 11 SCC 603,Union of India and Ors. v. Jaipal Singh : (2004) 1 SCC 121, Baldev Singh v. Union of India and Ors. : (2005) 8 SCC 747 and Banshi Dhar v. State of Rajasthan and Anr. : (2007) 1 SCC 324 have been relied upon by the learned Counsel for the Appellant in support of the contention noticed above.
7. On the other hand, learned Counsel for the Respondent has relied on the norms under the Sastry Award governing disciplinary action in respect of employees of the public sector banks. Pointing out the relevant clauses of the Sastry Award, it is argued that upon the acquittal of the concerned employee from a criminal charge it is open for the Appellant-bank to initiate a departmental proceeding which, admittedly, in the present case was not so done. Learned Counsel has pointed out that in such a disciplinary proceeding, if the charges against the acquitted employee are found to be substantiated, necessa
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