STATE OF BIHAR & ORSversusARBIND

                         [2013) 17 S.C.R. 296


A                     STATE OF BIHAR & ORS
                                    v.
                               ARBIND
                   (Civil Appeal No. 6265 of 2013)
                            JULY 26, 2013
B
             [ANIL R. DAVE AND DIPAK MISRA, JJ.]

         Service Law:

c        Subsistence Allowance - Non-payment of - On the
    ground that delinquent did not stay at head-quarters during
    departmental proceedings - Propriety of - Held: Suspended
    employee is entitled to subsistence allowance - In the instant
    case, there is no rule providing for presence of the employee
    at the headquarters, to be entitled to get subsistence
D   allowance - Direction to release the subsistence allowance.

         Disciplinary Proceedings - Initiation of - Delinquent
    leaving the head-quarters due to paucity of money, as no
    subsistence allowance released, despite repeated
E   representations - Ex-parte proceedings - Resulting in order
    of dismissal from service - Writ petition dismissed - In writ
    appeal High Court quashed order of dismissal and directed
    payment of 50% of the salary, release of subsistence
    allowance and initiation of disciplinary proceedings afresh
F   after notice to the delinquent - On appeal - Held: Order of
    High Court was justified - In view of the fact that the delinquent
    has restricted his claim for subsistence allowance for a
    particular period till the date of order of High Court to Rs. one
    lakh, the same directed to be paid within specified period.
G
         The respondent-employee was placed under
    suspension, while departmental proceedings were
    initiated against him. The respondent was required to
    stay at the headquarters during the proceedings. Despite

H                                  296
              STATE OF BIHAR v. ARBIND                     297

several representations by the respondent, subsistence             A
allowance was not released. Therefore, the respondent
was forced to leave the head-quarters due to paucity of
money. He did not participate in the departmental
proceedings, and eventually as a result of ex-parte
proceedings, he was dismissed from service.                        B
Respondent filed writ petition challenging the order of
dismissal: Single Judge of High Court dismissed the
petition. Division Bench of High Court setting aside the
order of Single Judge, directed the appellant-State to pay
50% of the arrears of salary and the subsistence                   c
allowance in full and to commence departmental
proceedings afresh after issuing notice to the delinquent.
Hence, the present appeal.

     Disposing of the appeal, the Court
                                                                   D
       HELD: 1. It is settled in law that an order of
 suspension never puts an end to the service of an
 employee. He is not only entitled to the salary but is also
 eligible to get the subsistence allowance. In the preseiit
 case there is no rule that provides that the suspended            E
·employee should remain at the headquarters to be
 entitled to get subsistence allowance. That apart, the
 respondent had clearly stated about his financial
 condition and .his inability to remain at the headquarters.
 It is not the case of the functionaries of the State that he      F
 was asked to furnish a certificate and he did not furnish.
 The whole case rests on the fact that as the respondent-
 em p I oyee did not remain at the headquarters, no
 subsistence allowance was paid. Thus, in the present
 case, even if the doctrine of prejudice is applied, it is quite   G
 obvious that the respondent was absolutely
 handicapped to participate in the departmental
 proceedings and hence, prejudice was caused. In this
 backdrop, there is no error in the conclusion arrived at

                                                                   H
    298        SUPREME COURT REPORTS [2013] 17 S.C.R.


A   by the High Court as far as the quashing of order of
    punishment is concerned. [Paras 9, 15 and 18) [302-E-F;
    306-A; 307-E, F]

         Khem Chand vs. Union of India and Ors. AIR 1963 SC
    687: 1963Suppl. SCR 229; The State of Madhya Pradesh
8
    vs. The State ofMaharashtra and Ors. AIR 1977 SC 1466:
    1977· (2) SCR 555; O.P. Gupta vs. Union of India and Ors.
    AIR 1987 SC 2257: 1988 (1) SCR 27; Fakirbhai Fulabhai
    Solanki vs. Presiding Officer and Anr. AIR 1986 SC 1168;
    Capt. M. Paul Anthony vs. Bharat Gold Mines Ltd. and Anr.
C   AIR 1999 SC 1416: 1999 (2) SCR 257; Jagdamba Prasad
    Shukla vs. State of U. P. and Ors. AIR 2000 SC 2806: 2000
    (7) SCC 90; Anwarun Nisha Khatoon vs. State of Bihar and
    Ors. (2002) 6 SCC 703; Indra Bhanu Gaur vs Committee,
    Management of M.M. Degree College and Ors. (2004) 1 SCC
D   281: 2003 (5) Suppl. SCR 327; Ganesh Ram vs. State of
    Bihar (1995) 2 Pat LJR 690; U. P. State Textile Corpn. Ltd.
    vs. P. C. Chaturvedi and Ors. (2005) 8 SCC 211: 2005 (3)
    Suppl. SCR 849 - relied on.

E       2. The full salary from 1.1.1996 till the date of
  suspension, i.e., 26.6.1997 has not been paid and hence,
  the direction by the High Court to pay the same cannot ·
  be found fault with. As far as subsistence allowance is
  concerned from 25.6.1997 till 13.9.2000, the same has to
F be paid at the rate of 50% of the salary. The respondent
  has restricted his claim for subsistence allowance from
  13.9.2000 till the date of order passed by the High Court
  to Rs.1,00,0001- (rupees one lac only). The aforesaid
  amount shall be computed and be paid to the respondent
G within a period of six weeks. It is clarified that the period
  after the order of the High Court shall be treated as period
  under suspension till the termination of the disciplinary
  proceeding and the subsistence allowance shall be paid
  in accordance with rules. The enquiry shall commence
  after the amount is released. [Para18] [307-F-H; 308-A-B]
H
            STATE OF BIHAR v. ARBIND                      299

                     Case Law Reference:                        A
   1963 Suppl. SCR 229          relied on       Para 9
   1977 (2) SCR 555             relied on       Para 9
   1988 (1) SCR 27              relied on       Para 10
                                                                B
   AIR 1986 SC 1168             relied on       Para 11
   1999 (2) SCR 257             relied on       Para 12
   2000 (7) sec 90              relied on       Para 13
                                                                c
   (2002) 6 sec 103             relied on       Para 14
  . 2003 (5) Suppl. SCR 327     relied on       ·Para 14
   (1995) 2 Pat LJR 690         relied 'on      Para 16
   2005 (3) Suppl. SCR 849      relied on        Para 17        D

    CtVIL APPELLATE JURISDICTION : Civil Appeal No.
6265 of 2013

    From the Judgment and Order dated 21.01.2011 of the
High Court of Judicature at Patna in L.P.A No. 477 of 2009.     E

    Manish Kumar, Gopal Singh. for the Appellants. .

    Atul Chitale, Suresh lshwar, Atishi Dipankar for the
Respondent.                                                     F

    The Judgment of the Court was delivered ·

    1. Leave granted.

     2. Pregnability of order dated 21.1.2011 passed by the G
High Court of Judicature at Patna in L.P.A. No. 477 of 2009
whereby the Division Bench has overturned the order dated
26.2.2009 passed by the learned Single Judge in CW~C No.
521 O of 2002 and directed the respondents therein to pay 50%
of the arrears of salary and the subsistence. allowance in full H
    300        SUPREME COURT REPORTS [2013] 17 S.C.R.

A   within a period of two months and to commence the
    departmental proceeding afresh after issuing notice to the
    employee has been called in question by the State of Bihar and
    its functionaries in the present appeal by special leave.

        3. Filtering the unnecessary details, the facts which are
8
  essential to be. stated are that the respondent was appointed
  as a Headmaster {Education Service) by Memorandum No.
  527 dated 27.9.1991 and he joined in the Government Basic
  School, Bakulahar on 1.10.1991. While he was functioning as
  the Headmaster, the District Superintendent of Education,
c Bettiah made a complaint to the Regional Deputy Director
  (Education), Muzaffarpur regarding illegal payment of salary by
  the respondent to the non-existing teachers. A communication
  was sent by the Regional Deputy Director on 18.9.1996 to the
  Director, Primary Education, Patna, Bihar for needful action as
D the respondent had illegally withdrawn Rs.35 lakhs from the
  treasury by manipulating the attendance register and furnishing
  false information. The competent authority on 10.10.1996
  directed for initiation of a departmental enquiry and lodging of
  an FIR against the delinquent employee. Thereafter, as the facts
E would undrape, an FIR was lodged which gave rise to GPS No.
  50of1996 under Sections 409 and 420, l.P.C. The respondent
  was put under suspension by order dated 26.5.1997 and a
  departmental proceeding was initiated against him on certain
  charges. While putting the respondent under suspension, his
F headquarters was fixed at the office of the District Education
  Officer, West Champaran. The respondent stayed at the
  headquarters till 3.10.1997 and subsequently left the place as
  he was not in a position to remain there due to paucity of
  money, for his salary was not paid for one year and further no
G subsistence allowance was paid. He submitted number of
  representations to release the subsistence allowance, but the
  authorities maintained sphinx-like silence. In the meantime, the
  criminal case continued and he was acquitted by the learned
  trial magistrate vide judgment dated 18.4.2000. As the
H respondent did not participate in the departmental proceedings
              STATE OF BIHAR v. ARBIND                      301


it continued ex parte and eventually on the basis of the enquiry   A
report, the disciplinary authority passed an order of dismissal
on 30.9.2000.

      4. Being dissatisfied with the order of dismissal, the
appellant invoked the extra-ordinary jurisdiction of the High
                                                                   B
Court by preferring a writ petition being CWJC No. 5210 of
2002. It was not stated in the petition that he had already
preferred a departmental appeal. The learned Single Judge
took exception to the same and also did not accept the other
contentions raised by the writ petitioner and dismissed the writ
petition.                                                          C

      5. Aggrieved by the order passed by the learned Single
 Judge, the respondent preferred an intra-Court appeal before
 the Division Bench. It was contended that as he had been
 acquitted in the criminal case, the disciplinary authority would D
 have been well-advised to drop the departmental proceeding
·and not proceed further since the ch·arges in the criminal trial
 and the departmental proceeding were similar; and that the
 departmental proceeding was vitiated as the· principles of
 natural justice had been flagrantly violated because he was not E
 in a position to participate in the enquiry due to his penurious
 condition. Emphasis was laid on the factum of non-payment of
 salary for one year which was payable to him and further non-
 release of the subsistence allowance. The said submissions
 were strenuously opposed by the State on the ground that the
                                                                  F
 charges were not similar and, therefore, the continuance of the
 enquiry and the consequent order of dismissal could not be ·
 found fault with. That apart, it was urged that the subsistence
 allowance was not paid to the delinquent employee as he·
 chose not to remain at the headquarters despite such a ·
 stipulation .being incorporated in the order of suspension.      G

     6. The Division Bench did not accept the first submission
but found substance in the second one and accordingly set
aside the order of punishment and directed the authorities to
pay 50% arrears of salary and the subsistence allowance in full    1-1


                                                    --
    302           SUPREME COURT REPORTS [2013] 17 S.C.R.


A   within a period of two months. It granted liberty to the
    department to proceed afresh against the employee and
    complete the same within a period of six months from the date
    of payment of subsistence allowance. The said order is the
    subject-matter of assail in this appeal.
B
        7. We have heard Mr. Manish Kumar, learned counsel for
    the State and Mr. Atul Chitley, learned senior counsel for the
    respondent.

         8. From the adumbration of facts, it is clear as crystal that
C   the subsistence allowance was not paid to the respondent on
    the ground that he had not remained at the headquarters. The
    High Court has returned a finding that he had intimated the
    authorities expressing his inability to stay there because of his
    impecuniousity and despite submission of number of
o   representations by the employee in this regard no steps were
    taken to disburse the said allowance. That is the bedrock of
    reasoning of the order passed by the Division Bench.

         9. At this juncture, it is appropriate to recapitulate the
    principles laid down by this Court pertaining to payment of
E   subsistence allowance and the effect of such non-payment. It
    is settled in law that an order of suspension never puts an end
    to the service of an employee. He is only not entitled to the
    salary but is eligible to get the subsistence allowance. It has
    been held in Khem Chand v. Union of India and others' that
F   the effect of an order of suspension is that though the employee
    continues to be a member of the service he is not permitted to
    work and is paid only subsistence allowance which is less than
    his salary. The said principle has been reiterated in The State
    of Madhya Pradesh v. The State of Maharashtra and others2.
G
        1O. It is apt to note that the subsistence allowance is
    governed by the service rules. It is given to a suspended

    1.   AIR 1963 SC 687.
H 2.     AIR 1977 SC 1466.
                STATE OF BIHAR v. ARBIND                        303


employee for his sustenance. It is in a way making a provision          A
for maintenance and survival. In O.P. Gupta v. Union of India
and others 3 it has been stated that the very expression
"subsistence allowance" has an undeniable penal significance.
It basically means - a means of supporting life, especially a
minimum livelihood. Thereafter, the learned Judges proceeded            B
to observe thus:-

      "It is a clear principle of natural justice that the delinquent
      officer when placed under suspension is entitled to
      represent that the departmental proceedings should be             C
      concluded with reasonable diligence and within a
      reasonable period of time. If such a principle were not to
      be recognized, it would imply that the Executive is.being
      vested with a totally arbitrary and unfettered power of
      placing its officers under disability and distress for an
      indefinite duration."                                             D

       11. In Fakirbhai Fulabhai Solanki v. Presiding Officer and
 another, while dealing with a denial of subsistence allowance
 during a proceeding before an Industrial Tribunal, the Court
 expressed that if no amount is paid during the pendency of such        E
 an application it has to be held that the workman concerned
 has been denied a reasonable opportunity to defend himself
 in the proceedings before the Tribunal and such denial leads
 to violation of principles of natural justice and consequently
 vitiates the proceedings before the Tribunal under sub-section         F
 (3) of Section 33 of the Act and any decision give~ in those
 proceedings against the workman concerned.

       12. In Capt. M. Paul Anthony v. Bharat Gold Mines Ltd.
· and another°, the Court expressed the view that when on
  account of penury occasioned by non-payment of subsistence            G
  allowance an employee is not able to undertake a journey to

 3.   AIR 1987 SC 2257.
 4.   AIR 1986 SC 1168.
 5.   AIR 1999 SC 1416.                                                 H
    304            SUPREME COURT REPORTS [2013] 17 S.C.R.

A attend the disciplinary proceedings, the findings recorded by
  the Inquiry Officer on such proceedings which are held ex parte
  stand vitiated.

        13. In Jagdamba Prasad Shukla v. State of U. P. and
B others• it has been ruled that the payment of subsistence
  allowance, in accordance with the Rules, to an employee under
  suspension is not a bounty. It is a right and if a suspended
  employee is unable to appear for want of funds on account of
  non-payment of subsistence allowance, it is a clear case of
C breach of principles of natural justice on account of the denial
  of reasonable opportunity to defend himself in the departmental
  enquiry and that vitiates the departmental enquiry and the
  consequent order of removal from service. It is seemly to state
  here that in the said case the employee had intimated the
  authorities about the financial crunch.
D
        14. In this context, we may fruitfully refer to a two-Judge
  Bench decision in Anwarun Nisha Khatoon v. State of Bihar
  and others'. In the said case the employee claimed for
  subsistence allowance for the entire period of suspension of
E her husband, who was not terminated, and during the pendency
  of the enquiry had breathed his last. The wife preferred a writ
  petition before the High Court of Patna which was dismissed
  on the ground that the husband of the appellant therein was only
  present for one day at the headquarters and hence, not entitled
F to the benefit. Before this Court, it was argued that under Rule
  96(2) of the Bihar Service Code a Government servant is
  required to furnish a certificate that he is not engaged in any
  other employment, business, profession or vocation and as
  such a certificate was never submitted, the subsistence
G allowance was not paid. Reliance was placed upon the authority
  of the High Court in the case of Ganesh Ram v. State of Biha~
  wherein the High Court had opined that it was not necessary
   6.   AIR 2000 SC 2806.
   1.   (2002) 6   sec 103_
H 8.    1995 2 Pat LJR 690.
             STATE OF BIHAR v. ARBIND                        305

for an employee to attend the work after suspension. It was also A
stated therein that the suspended employee could not be
compelled to mark attendance. Further it was ruled that the ·
authority was entitled to ensure itself about the presence of
suspended employee at the headquarters before making
payment of subsistence allowance and in the event of a dispute B
it would be the employee to establish his presence at the
headquarters. This Court, commenting on the said decision,
ruled thus: -

    ."In our view, this authority, far from assisting the
     respondents, is against them. This authority shows that         C
     there is no requirement to mark attendance. To us also no
     rule could be shown which required .a suspended
     employee to mark attendance. The respondents can at the
     most ask for a certificate that the appellant's husband was
     not engaged in any other employment, business,                  D
     profession or vocation. The appellant's husband having
     died, he could not have furnished such a certificate. At no
     stage have the respondents asked the appellant to give
     such a certificate. Thus the grant of subsistence allowance
     cannot be denied on the ground that such a certificate is       E
     not given."

      After so holding, the Court directed that after the employee
filed an affidavit that her husband was not engaged in any other
employment, business, profession or vocation, the subsistence
                                                                     F
allowance would be released in her favour.

      15. From the aforesaid authority it is clear as day that the
presence at the headquarters was not a requirement under the
Rule. In the case at hand, there is no rule that provides that the
suspended employee should remain at the headquarters to be           G
entitled to get subsistence allowance. That apart, as is evident,
the respondent herein had clearly stated about his financial
condition and his inability to remain at the headquarters. It is
not the case of the functionaries of the State that he was asked
to furnish a certificate and he did not furnish. The whole case      H
    306           SUPREME COURT REPORTS [2013] 17 S.C.R.


A   rests on the fact that as the respondent-employee did not
    remain at the headquarters no subsistence allowance was paid.

         16. At this juncture, we may note two authorities.which
    relate to the effect of non-payment of subsistence allowance.
    In Indra Bhanu Gaur v. Committee, Management of M.M.
8
    Degree College and others•, it has been ruled that unless
    prejudice is shown and establis,hed, mere non-payment of
    subsistence allowance cannot ipso facto be a ground to vitiate
    the proceedings in every case. It has to be specifically pleaded
    and established as to in what way the affected employee is
C   handicapped because of non-receipt of subsistence allowance.
    Unless that is done, it cannot be held as an absolute proposition
    in law that non-payment of subsistence allowance amounts to
    denial of opportunity and vitiates the departmental proceedings.

D       17. In UP. State Textile Corpn. Ltd. v. P.C. Chaturvedi
    and others 10 , the two-Judge Bench relying on the
    pronouncement in Indra Bhanu Gaur (supra), has ruled thus: -

          "So far as the effect of not paying the subsistence
          allowance is concerned, before the authorities no stand
E
          was taken by Respondent 1 employee that because of
          non-payment of subsistence allowance, he was not in a
          position to participate in the proceedings, or that any other
          prejudice in effectively defending the proceedings was
          caused to him. He did not plead or substantiate also that
F         the non-payment was either deliberate or to spite him. It
          is ultimately a question of prejudice. Unless prejudice is
          shown and established, mere non-payment of subsistence
          allowance cannot ipso facto be a ground to vitiate the
          proceedings in every case. It has to be specifically pleaded
G         and established as to in what way the affected employee
          is handicapped because of non-receipt of subsistence
          allowance. Unless that is done, it cannot be held as an

    9.   (2004) 1 sec 2a1.
H 10. (2005) a sec 211.
               STATE OF BIHAR v. ARBIND                        307


     absolute position in law that non-payment of subsistence          A
     allowance amounts to denial of opportunity and vitiates
     departmental proceedings."

        18. We have noted the aforesaid authorities as doctrince
 of prejudice has been associated with non-payment of
                                                                       8
 subsistence allowance. We need not dwell on the concept of
 absolute position in law. We are only inclined to state that it
 would depe_nd upon the stipulations made in the rules and the
 facts of the case. We may hasten to clarify that rules made by
 the Competent Authority are always subject to their
 constitutional validity. As far as the present case is concerned      C
 the facts do clearly reveal that the salary that was due to the
  respondent was not paid for unfathomable reason. The
  subsistence allowance was not paid on the singular ground that
  he had not stayed at the headquarters despite a stipulation in
  the order of suspension. The respondent had submitted number         D
 of representations with regard to his penurious condition to stay
  at the headquarters and participate in the disciplinary
  proceedings. There is nothing in the Rules which would require
  for a suspended employee to remain at the headquarters. Thus,
  in the present case, even if the doctrince prejudice is applied,     E
  it is quite obvious that the respondent herein was absolutely
. handicapped to participate in the departmental proceedings
  and hence, prejudice was caused. In this backdrop, we do not
  find any error in the conclusion arrived at by the High Court as
   far as the quashing of order of punishment is concerned. As         F
  far as the directions issued by the High Court are concerned,
  the learned counsel for the State has submitted that the full
  salary from the period 1.1.1996 till the date of suspension, i.e.,
  26.6.1997 has not been paid and hence, the direction by the
   High Court to pay the same cannot be found fault with. As far       G
   as subsistence allowance is concerned from 25.6.1997 till
   13.9.2000, the same has to be paid at the rate of 50% of the
  salary. Mr. Chitaley, learned counsel for the respondent has
  stated that he would restrict his claim for subsistence allowance
  from 13.9.2000 till the date of order passed by the High Court       H
   308          SUPREME COURT REPORTS [2013] 17 S.C.R.

A to Rs.1,00,000/- (rupees one lac only). The aforesaid amount
  shall be computed and be paid to the respondent within a
  period of six weeks. We may hasten to clarify that the period
  after the order of the High Court shall be treated as period
  under suspension till the termination of the disciplinary
B proceeding and the subsistence allowance shall be paid in
  accordance with rules. The enquiry shall commence after the
  amount is released and the same shall be concluded within
  three months therefrom.

      19. With the aforesaid modifications in the order of the
C High Court, the appeal is disposed of with no order as to costs.

   Kalpana K. Tripathy                           Appeal disposed of.