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IN THE HIGH COURT OF CALCUTTA
Arun Mishra and Joymalaya Bagchi, JJ.
State Bank of India and Others – Appellants
Versus
Bimalendu Chattopadhyay – Respondent
F.M.A. Nos. 1118 & 1119 of 2012
Decided On : 28-06-2013
For the Appellant :L.K. Gupta, Ashim Kr. Routh, Sudeep Pal Choudhuri and Indrajit Bhattacharjee, Advocate.
For the Respondent:Lakshmi Kanta Pal, Advocate.
An employee who has been found guilty in disciplinary proceedings and has been awarded salary and increments by the Review Committee, to which he was not prima facie entitled, is not entitled to interest on the delayed payment of salary and allowances during the period of suspension.
Headnote:
PAYMENT OF INTEREST ON SALARY DURING SUSPENSION - STATE BANK OF INDIA EMPLOYEES SERVICE REGULATIONS, 1976, REG. 10A - INTEREST NOT PAYABLE TO EMPLOYEE FOUND GUILTY IN DISCIPLINARY PROCEEDINGS.
Fact of the Case:
An employee of State Bank of India was placed under suspension from 1992 to 1997. Following a disciplinary enquiry, he was found guilty on various charges and punished with reduction in pay and scale. The Reviewing Authority directed that the period of suspension be treated as on-duty and ordered payment of salary and allowances for that period. The employee filed a writ petition claiming interest on the delayed payment of salary and allowances. The Single Bench allowed the writ petition and ordered payment of interest at the rate of 8.5% per annum.
Finding of the Court:
The court held that the employee was not entitled to interest on the delayed payment of salary and allowances. It reasoned that the employee had been found guilty in the disciplinary proceedings and that the suspension was not wholly unjustified. The court also noted that the employee had been awarded salary and increments by the Review Committee, to which he was not prima facie entitled. The court found that no equitable consideration could arise in the employee's favor for the payment of interest.
Issues: Whether the employee was entitled to interest on the delayed payment of salary and allowances during the period of suspension.
Ratio Decidendi: The court held that the employee was not entitled to interest on the delayed payment of salary and allowances because: 1. The employee had been found guilty in the disciplinary proceedings and the suspension was not wholly unjustified. 2. The employee had been awarded salary and increments by the Review Committee, to which he was not prima facie entitled. 3. No equitable consideration could arise in the employee's favor for the payment of interest.
Final Decision: The court allowed the appeal filed by the State Bank of India and dismissed the appeal filed by the employee. It set aside the order of the Single Bench that had directed the payment of interest.
Arun Mishra, J.
1. Both the appeals, being F.M.A.1118 of 2012 and F.M.A.1119 of 2012, are arising out of the common judgment and order dated 24.11.2011 passed by the Single Bench in W.P.No.436 (W) of 2004.
2. The writ petition was filed by an employee of the State Bank of India for a direction upon his employer to make payment of interest on delayed payment of his salary and certain other emoluments for the period during which he was kept under suspension. It appears that he was under suspension with effect from 12th March, 1992 to 7th May, 1997. Departmental enquiry was initiated and punishment was inflicted upon him. After the disciplinary enquiry, the authority found 19 charges were proved against the petitioner and out of them three were found partly proved. He was imposed with punishment of reduction of middle management cadre scale-II and was placed at the initial stage of time scale. It was also decided by the disciplinary authority that no salary and allowance, increments etc., other than the subsisting allowance already released to him, would be paid to him during the period of his suspension. However, the appeal preferred by the petitioner was dismissed by the Appellate Authority. A review petition was filed before the Review Committee of the Bank. The Reviewing Authority did not interfere with the finding of the guilt recorded by Disciplinary Authority and the Appellate Authority but, at the same time, reduced the punishment of the petitioner and directed reduction of pay by four stages with cumulative effect in the time scale in middle management grade scale-III. The Reviewing Authority also directed that the period of suspension may also be treated as on-duty. The order was passed for payment of the salary and allowances from 12th March, 1992 to 7th May, 1997 after reduction of subsistence allowance already paid to him. The order was communicated to the petitioner on 31st December, 2001. The petitioner retired from his service on 31st March, 2002. He filed a writ petition on 19.6.2004 claiming interest of his salary, allowances and other emoluments payable during the period 12.3.1992 to 7.5.1997. The Bank contested the claim. The Single Bench allowed the writ application and ordered the payment of interest on equitable grounds relying upon the decision in Anil Kr. Saha v. The Board of Councilors of Nawadeep Municipality & Ors. (2009) 4 CHN 694. Other decisions have also been referred by the Single Bench. It has been observed that the petitioner had been deprived of his legitimate dues during the period he remained under suspension in terms of full salary and allowance, for which he ought to be compensated with for delayed payment of such salary and allowance by way of interest. The interest at the rate of 8.5% per annum has been ordered to be paid uptil the date he was paid arrear salary and other dues in terms of the direction of the Review Committee.
3. The legality of the aforesaid order has been questioned by the State Bank of India and others by preferring an appeal, being F.M.A.1118 of 2012; whereas the employee preferred an appeal, being F.M.A.1119 of 2012, for enhancement of the rate of interest from 8.5% per annum to 18% per annum.
4. Shri Gupta, learned Senior Counsel appearing for the Bank, has submitted that it is the case where the petitioner has not been exonerated. He was found guilty. He was under suspension. Only punishment was reduced and guilt also remained. The Review Committee has taken a decision on 31st December, 2001. Thus, till then, there was no right available to the petitioner to claim that amount. No equitable consideration is available to the petitioner. On the other hand, once he had been found guilty, it would be against equitable consideration to grant interest as ordered by the Single Bench. The decision in Anil Kumar Saha's case (Supra) is completely distinguishable. The petitioner should consider himself lucky to have been awarded the full salary and benefit of increments
