The Delhi High Court has held that when an employee is reinstated following an acquittal that is not clean or honourable (i.e., based on benefit of doubt), then such employee is not automatically entitled to back wages or other service benefits for the period of absence. The treatment of such a period is left to the discretion of the competent authority as per the applicable service rules.
The Court reasoned it justified since the employer is not at fault for the employee’s absence from duty, such as when the absence is due to a criminal conviction mandated by law (Section 10(1)(b)(i) of the Banking Regulation Act, 1949). The employer’s decision, if exercised based on relevant facts (like the nature of the acquittal), cannot be interfered with by the court under writ jurisdiction.
Furthermore, if an employee accepts the conditions of reinstatement without protest, they are subsequently barred from challenging those conditions, added the Court while quashing the order of the Single Judge to the extent the appellant (SBI) was directed to count the period of absence for the purpose of the respondent’s pensionary and retiral benefits. The Court found that the appellant’s discretionary decision to deny this benefit was valid, given that the respondent’s acquittal was on the basis of benefit of doubt and not a full exoneration.
The Division Bench comprising the Chief Justice Devendra Kumar Upadhyaya and Justice Tejas Karia observed that the respondent’s acquittal was not a ‘clean acquittal’ but was based on the benefit of doubt, as the prosecution’s case was found to be full of doubts. It was noted that the respondent had accepted the conditions of his reinstatement, which explicitly denied salary and service benefits for the period of his absence, without any protest or demur.
The Bench further observed that the criminal prosecution was initiated by a private individual, not the appellant bank. Therefore, the appellant could not be held responsible for keeping the respondent out of service, especially since Section 10(1)(b)(i) of the Banking Regulation Act, 1949, prohibits a banking company from employing a person convicted of an offence involving moral turpitude.
The Bench analysed Rule 68A(8) of the SBI Officers’ Service Rules, noting that it grants the disciplinary authority the discretion to decide how the period of suspension should be treated in cases where the officer is not ‘fully exonerated’. The Bench emphasized that this discretion is essential to maintain discipline and protect public interest, particularly when an acquittal is not honourable.
Briefly, the respondent, who was a Branch Manager for the State Bank of India (appellant), was arrested following a bribery complaint, and was subsequently suspended. Later, the respondent was convicted under the Prevention of Corruption Act, 1988, and sentenced to imprisonment. Consequently, he was dismissed from service.
On appeal, he was acquitted by the High Court, noting that the prosecution’s case was full of doubt. Following his acquittal, the appellant reinstated him, with the conditions that he would not receive any salary for the period he was out of service and that this period would not be counted for any service or terminal benefits.
The respondent accepted these conditions without protest, rejoined service, and subsequently retired. However, he later filed a petition seeking arrears of salary and re-fixation of pensionary benefits for the period of suspension. The Single Judge denied back wages but directed that the period be counted for pensionary and retiral benefits.
Appearances:
Advocates Rajiv Kapur and Riya Sood, for the Appellant
Advocates Neeraj Jain and M.T. Reddy, for the Respondent
