Holding

The competent authority's opinion that the suspension was not wholly unjustified is a permissible view and cannot be interfered with, so back wages are not payable.

Summary

The respondent, a bill collector in the Greater Hyderabad Municipal Corporation, was suspended in 1997 on allegations of accepting a bribe. He was later acquitted in the criminal trial because the complainant turned hostile and the prosecution failed to prove the gratuity was illegal. The competent authority, after re‑examining the case in 2008, held that the suspension was not wholly unjustified and denied back wages for the suspension period. The Andhra Pradesh Administrative Tribunal and the High Court had earlier granted the respondent back wages, treating the suspension as on‑duty. The Supreme Court held that under sub‑rule (3) of F.R. 54‑B, the competent authority’s opinion on the justification of suspension is decisive and not subject to interference, even if the employee is acquitted. Consequently, the Court allowed the employer’s appeal, set aside the Tribunal and High Court orders, and refused the back‑wage claim.

Issues considered

Whether an employee acquitted in criminal proceedings is entitled to full back wages for the period of suspension under sub‑rule (3) of F.R. 54‑B.
Whether the competent authority's view that the suspension was not wholly unjustified is reviewable by a tribunal or court.

Legislation cited

Andhra Pradesh Fundamental Ruless. 54-B sub-rule (3), s. 54-B sub-rule (8)

Subjects

service lawsuspensionback wagesacquittalFundamental Rulesadministrative lawcompetent authoritymunicipal corporation

Judgment

[2011] 9 S.C.R. 594

A THE GREATER HYDERABAD MUNICIPAL
... ~

CORPORATION
v.
M. PRABHAKAR RAO

B
Civil Appeal No. 6014 of 2011
JULY 28, 2011
-
[R.V. RAVEENDRAN AND A.K. PATNAIK, JJ.]

Service Law:
c
Wages for the period of suspension - Held: Under sub-
r. (3) of F. R. 54-8, even where the employee is acquitted of
the charges in the criminal trial for lack of evidence or
otherwise, it is for the competent authority to form its opinion
D
whether the suspension of the employee was wholly •
unjustified and so long as such opinion of the competent
authority was a possible view in the facts of the case and on
the materials before it, such view would not be interfered by
the tribunal or the court - In the instant case, the employee
was arrested on the report of the Deputy Director, Anti-
E Corruption Bureau for taking bribe - The chemical test was
found positive - The employee was arrested and released on
bail - He was placed under suspension immediately -During
trial, the complainant turned hostile - The employee was
acquitted by the trial court holding that there was a doubt I
F whether the amount paid was towards illegal gratification -
High Court held that recovery of the amount had been
proved, but purpose for which the amount was paid could not
be proved - On these materials, the view of the competent
authority that the suspension could not be regarded as wholly
G unjustified was a possible view which it could form under sub- ,,
r. (3) of F.R. 54-B - Fundamental Rules - F.R. 54-8 (3), ~

proviso.

The respondent, who was working as a Bill Collector
H 594
GREATER HYDERABAD MUNICIPAL CORPORATION 595
v. M. PRABHAKAR RAO
_,, ,.., in the Municipal Corporation of Hyderabad, was placed A
under suspension on 19.05, 1997 for demanding and
accepting illegal gratification from the complainant for
assessment of his house. On 28.06.2001, the competent
authority revoked the suspension of the respondent and
reinstated him in service without prejudice to the B
• prosecution pending against him. The respondent was
acquitted in the criminal case. The respondent's
representation seeking back-wages for the suspension
period and other consequential benefits was rejected by
the competent authority holding that his suspension c
could not be regarded as wholly unjustified. However, the
O.A. filed by respondent was allowed by the Andhra
Pradesh Administrative Tribunal. The writ petition filed by
the employer was dismissed by the High Court.
.... )·
Allowing the appeal filed by the employer, the Court D
..
HELD: 1.1 Sub-rule (3) of F.R. 54-B vests power on
the authority competent to order reinstatement to form an
opinion whether suspension of a Government servant
was wholly unjustified and if, in his opinion, the E
suspension of such Government servant is wholly
unjustified, such Government servant will be paid full pay
and allowances to which he would have been entitled,
had he not been suspended. The proviso to sub-rule (3)
..' of F.R. 54-B, however, states that where such authority F
is of the opinion that the termination of the proceedings
instituted against the Government servant had been
delayed due to reasons directly attributable to the
Government servant then the Government servant shall
be paid for the period of such delay only such amount
G
(not being the whole) of such pay and allowances as it
t
may determine. Thus, even where the competent
authority is of the opinion that the suspension was
wholly unjustified, the Government servant may still not
be entitled to be paid the whole pay and allowances, but
H
596 SUPREME COURT REPORTS (2011] 9 S.C.R.

A may be paid such pay and allowances as may be
determined by the competent authority. [Para 8] [600-G-
H~ 601-A-C]

1.2. Therefore, even where the employee is acquitted
of the charges in the criminal trial for lack of evidence or
8
otherwise, it is for the competent authority to form its
opinion whether the suspension of the employee was
wholly unjustified and so long as such opinion of the
competent authority was a possible view in the facts and
circumstances of the case and on the materials before
C him, such opinion of the competent authority would not
be interfered by the tribunal or the court. [Para 11) (605-
B-D]

1.3.The rationale, on which sub-rule (3) of F.R. 54-B
D is based, is that during the period of suspension an
employee does not work and, therefore, he is not entitled
to any pay unless after the termination of the disciplinary
-
proceedings or the criminal proceedings the competent
authority is of the opinion that the suspension of the
E employee was wholly unjustified. [Para 9] [601-D-E]

Union of India & Ors. v. K. V. Jankiraman & Ors. 1991 (3)
SCR 790 = (1991) 4 sec 109 - relied on.
1.4. In the instant case, the Deputy Director, Anti-
F Corruption Bureau had reported that the respondent had ,.
'
taken Rs.2,000/- from the complainant for assessment of
his house; that the bribe amount was recovered from the
posse.ssion of the respondent; and that the test of right
hand fingers and shirt pocket of the respondent was
G positive. He was arrested and released on bail. He was
placed under suspension with immediate effect. The trial
court acquitted the respondent and the High Court
sustained the acquittal. However, the High Court found
that the complaint (PW-1) had turned hostile and held that
H the recovery of the amount had been proved by the
GREATER HYDERABAD MUNICIPAL CORPORATION 597
v. M. PRABHAKAR RAO
_.,, _,...,
prosecution, but the purpose for which the amount was A
paid could not be proved and, therefore, the trial court
rightly came to the conclusion that there was ·a doubt

-•
whether the amount that was paid to the respondent was
towards illegal gratification. On these materials, the
competent authority has formed the opinion in his order B
..J dated 17.11.2008 that the suspension of the respondent
cannot be regarded as wholly unjustified and has
declined to grant any salary and allowance to the
respondent during the period of suspension. This opinion
of the competent authority was a possible view on the c
materials which the competent authority could form in the
facts and circumstances of the case while passing an
order in exercise of his powers under sub-rule (3) of F.R.
54-8, declining to allow the salary and allowances of the
,
.\ respondent for the period of suspension. [Para 1O] [602-
D
.. G-H; 603-A-B; 604-A-E]
1.5. In the result, the order of the Tribunal and the
impugned order of the High Court are set-aside. [Para 12]
[605-D]
Case Law Reference: E
1991 ( 3 ) SCR 790 relied on Para 9
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
6014 of 2011.
""I\
From the Judgment & Order dated 18.02.2010 of the High F
Court of Andra Pradesh at Hyderabad in W.P. No. 1564 of
2010.
D. Bharathi Reddy for the Appellant.
Naveen R. Nath, for the Respondent. G
~
The Judgment of the Court was delivered by

~
A. K. PATNAIK, J. 1. Delay condoned.
2. Leave granted.
H
598 SUPREME COURT REPORTS [2011] 9 S.C.R.

A 3. This is an appeal against the order dated 18.02.2010 -+ '-

of the Division Bench of the Andhra Pradesh High Court
dismissing Writ Petition No.1564 of 2010 of the appellant
against the order dated 18.08.2009 of the Andhra Pradesh
Administrative Tribunal, Hyderabad, in O.A. No.7377 of 2008.
B 4. The facts briefly are that the respondent was working
as a Bill Collector in the Municipal Corporation of Hyderabad.
On 19.05.1997, he was placed under suspension by the
Commissioner & Special Officer, Municipal Corporation of
Hyderabad (for short 'the competent authority), as it was
c reported by the Deputy Director, Anti-Corruption Bureau, C.l.U.
and City Range Hyderabad, that he had demanded Rs.2,000/
- fr()m the complainant, M.R. Srinivas, for assessment of his
house and had accepted the bribe. On 28.06.2001, the
competent authority revoked the suspension of the respondent <
D and reinstated him in service without prejudice to the
prosecution pending against him and posted him in a non-focal
post. The respondent was thereafter prosecuted, but acquitted
by the trial court. The acquittal of the respondent was challenged
by the State in the Andhra Pradesh High Court in Criminal
E Appeal No. 2548 of 2004, but by judgment dated 06.12.2004,
the High Court dismissed the appeal.
5. The respondent then made a representation seeking
back-wages for the suspension period and other consequential
benefits, but the same was rejected by Memo dated
F 01.07.2005. The respondent filed O.A. No.3627 of 2005 before ,t

the Andhra Pradesh Administrative Tribunal, Hyderabad (for
short 'the Tribunal') against such rejection of back-wages for the
suspension period and by order dated 13.11.2006, the Tribunal
set aside the Memo dated 01.07 .2005 and remitted the matter
G to the authorities with a direction to re-examine the entire issue
with reference to the rules and pass appropriate orders duly i

giving an opportunity to the respondent. The competent authority '
in his order dated 17.11.2008 re-examined the issue and took
the view that the suspension of the respondent cannot be
H regarded as wholly unjustified and hence the back-wages and
~
GREATER HYDERABAD MUNICIPAL CORPORATION 599
~-
v. M. PRABHAKAR RAO [A.K. PATNAIK, J.]
\
consequential benefits for the suspension period cannot be paid A
to the respondent. Aggrieved, the respondent filed O.A.
No.7377 of 2008 before the Tribunal and by order dated
18.08.2009, the Tribunal allowed the 0.A. and set aside the
.. order dated 17 .11.2008 of the competent authority and
. declared that the respondent was entitled for treating the period B
of suspension as on duty and for release of all consequential
benefits. The appellant challenged the order of the Tribunal
before the High Court in Writ Petition No. 1564 of 2010 but by
the impugned order, the High Court dismissed the Writ Petition.

6. Mrs. D. Bharathi Reddy, learned counsel for the c
appellant, submitted that under the F.R. 54-B of the Andhra
Pradesh Fundamental Rules (for short 'F.R. 54-B'), which is
~
applicable to employees of the Municipal Corporation of
.. Hyderabac:I, the competent authority has been vested with the
power to pass an order as to how the period of suspension D
would be treated. She submitted that sub-rule (3) of F.R. 54-8
provides that where the competent authority is of the opinion
that the suspension was wholly unjustified, an employee would
be paid full pay and allowances to which he would have been
entitled, had he not been suspended. She submitted that in the E
facts of the present case, the respondent had been placed
under suspension for accepting a bribe from the complainant
·•'- and a charge sheet was filed in the court against him, but he
was acquitted by the trial court and the High Court has
sustained the acquittal of the respondent only because the F
prosecution witnesses had turned hostile and did not support
the prosecution version that the respondent was paid Rs.2,000/
- towards illegal gratification and on these facts, the competent
authority had rightly taken the view that the suspension cannot
• be regarded as wholly unjustified. She submitted that the orders G
passed by the Tribunal and the High Court, therefore, should
be set aside.
7. Mr. Naveen R. Nath, learned counsel for the respondent,
on the other hand, submitted that the High Court, after going
H
600 SUPREME COURT REPORTS [2011) 9 S.C.R.
...
A through the evidence adduced by the prosecution and the
finding of the Tribunal, did not find any compelling reason to
interfere with the judgment of the trial court acquitting the
respondent. He submitted that it will be clear from the judgments ..
of the trial court and the High Court that the suspension of the
'
B respondent was wholly unjustified and yet the competent
authority took the erroneous view in the order dated 17.11.2008
that the suspension of the respondent cannot be regarded as
unjustified. He submitted that the Tribunal has rightly held that
the suspension of the appellant was unjustified and the High
Court has held in the impugned order that the order of the
c Tribunal needs no interference.

8. Sub-rule (3) of F.R. 54-B is extracted hereinbelow: <

"(3) Where the authority competent to order reinstatement
D is of the opinion that the suspension was wholly unjustified,
the Government servant shall subject to the provisions of
sub-rule (8), be paid the full pay and allowances to which
he would have been entitled, had he not been suspended:

Provided that where such authority is of the opinion that the
E
termination of the proceedings instituted against the
Government servant had been delayed due to reasons
directly attributable to the Government servant, it may after
giving him an opportunity to make his representation [within -•
sixty days from the date on which communication to this
F regard is served on him] and after considering the
representation, if any submitted by him, direct for reasons
to be recorded in writing, that the Government servant shall
be paid for the period of such delay [only such amount (not
being the whole) of such pay and allowances as it may •'
G determine]."

Sub-rule (3) of F.R. 54-B extracted above, thus, vests power on
the authority competent to order reinstatement to form an
opinion whether suspension of a Government servant was
H wholly unjustified and if, in his opinion, the suspension of such
; ... GREATER HYDERABAD MUNICIPAL CORPORATION 601
v. M. PRABHAKAR RAO [A.K. PATNAIK, J.]
Government servant is wholly unjustified, such Government A
servant will be paid full pay and allowances to which he would
have been entitled, had he not been suspended. The proviso
to sub-rule (3) of F.R. 54-B, however, states that where such
• authority is of the opinion that the termination of the
4

proceedings instituted against the Government servant had B
been delayed due to reasons directly attributable to the
Government servant then the Government servant shall be paid
for the period of such delay only such amount (not being the
whole) of such pay and allowances as it may determine. In other
words, even where the competent authority is of the opinion that c
the suspension was wholly unjustified, the Government servant
may still not be entitled to be paid the whole pay and
.> allowances, but may be paid such pay and allowances as may
be determined by the competent authority.
-1
9. The rationale, on which sub-rule (3) of F.R. 54-B is D
based, is that during the period of suspension an employee
does not work and, therefore, he is not entitled to any pay unless
after the termination of the disciplinary proceedings or the
criminal proceedings the competent authority is of the opinion
that the suspension of the employee was wholly unjustified. This E
rationale has been explained in clear and lucid language by a
three-Judge Bench of this Court in Union of India & Ors. v. K. V.
Jankiraman & Ors. [(1991) 4 SCC 109]. At page 121 in Para
26 P.B. Sawant, J, writing the judgment for the Court in the
aforesaid case further observed: F

"26 ........ However, there may be cases where the
proceedings, whether disciplinary or criminal, are, for
example, delayed at the instance of the employee or the
., clearance in the disciplinary proceedings or acquittal in the G
criminal proceedings is with benefit of doubt or on account
of non-availability of evidence due to the acts attributable
to the employee etc. In such circumstances, the concerned
authorities must be vested with the power to decide
whether the employee at all deserves any salary for the H
602 SUPREME COURT REPORTS [2011) 9 S.C.R.

A intervening period and if he does, the extent to which he
deserves it. Life being complex, it is not possible to
anticipate and enumerate exhaustively all the
circumstances under which such consideration may
become necessary. To ignore, however, such
B circumstances when they exist and lay down an inflexible
rule that in every case when an employee is exonerated
in disciplinary/criminal proceedings he should be entitled
to all salary for the intervening period is to undermine
discipline in the administration and jeopardize public
c interests ..... "

It will be clear from what this Court has held in Union of India
& Ors. v. K. V. Jankiraman & Ors. (supra) that even in cases
where acquittal in the criminal proceedings is on account of
non-availability of evidence, the concerned authorities must be
0 vested with the power to decide whether the employee at all
deserves any salary for the intervening period, and if he does,
the extent to which deserves it. In the aforesaid case, this Court
has also held that this power is vested in the competent authority
with a view to ensure that discipline in administration is not
E undermined and public interest is not jeopardized and it is not
possible to lay down an inflexible rule that in every case where
an employee is exonerated in the disciplinary/criminal
proceedings he should be entitled to all salary during the period
of suspension and the decision has to be taken by the
F competent authority on the facts and circumstances of each
case.

10. In the facts of the present case, the Deputy Director,
Anti-Corruption Bureau, C.1.U. and City Range Hyderabad, had
G reported that the respondent had taken Rs.2,000/- from the ~
complainant, M.R. Srinivas, for assessment of his house and
had accepted Rs.2000/- from him on 14.05.1997 at his house
and that the bribe amount was recovered from the possession
of the respondent and that the test of right hand fingers and shirt
H pocket of respondent was positive and that he was arrested
"""':< .. GREATER HYDERABAD MUNICIPAL CORPORATION 603
v. M. PRABHAKAR RAO [A.K. PATNAIK, J.]
and released on bail and on such report, the respondent was A
'
placed under suspension with immediate effect by order dated
~
19.05.1997. The trial court, however, acquitted the respondent
of the charges and in the criminal appeal of the State, the High
"_.. Court sustained the acquittal of the respondent and dismissed
the criminal appeal. The reasons for sustaining the acquittal of B
the respondent given by the High Court in its judgment dated
06.12.2004 in the criminal appeal are quoted hereinbelow:

"The story of the prosecution is that the amount that was
recovered from the pocket of A.1 was paid by PW.1 on
demand made by A.1 and A.2 as illegal gratification and c
was accepted by A.1. The prosecution in order to prove
... the guilt of the respondents examined PWs 1 to 8 and
)
marked Exs. P.1 to P.13 and M.Os. 1 to 11. The lower
,, court after considering the evidence acquitted the
respondents by holding that the prosecution failed to prove D
that the amount recovered from A.1 was taken by him as
illegal gratification. PWs1 and 2 made a complaint to ACB
officials complaining that A.1 and A.2 demanded illegal
gratification for reducing the property tax and it was
accepted by them when tainted notes were given. But E
unfortunately, PWs 1 and 2 turned hostile and did not
support the prosecution version that they paid amount of
Rs.2,000/- to A.1 towards illegal gratification. Though the
recovery of the amount was proved by the prosecution, the
purpose for which the amount was paid could not be F
proved, therefore, the lower court rightly came to a
conclusion that there is a doubt whether the amount that
was paid to A.1 was towards illegal gratification. After
carefully going through the evidence adduced by the
.
'Ii
prosecution and the findings of the lower court, I do not find G
any compelling reasons to interfere with the judgment of
the lower court regarding the acquittal of both the
respondents. There are no grounds to interfere with the
judgment of the lower court."
H
.
/
604 SUPREME COURT REPORTS [2011) 9 S.C.R.
,.. ...
A Thus, the High Court found that PW-1, who made the
complaint that the respondent had demanded illegal
gratification for reducing the property tax, turned hostile and
.
did not support the prosecution version that he had paid •
Rs.2,000/- to the respondent towards illegal gratification.
The High Court also held that the recovery of the amount "
B
was proved by the prosecution, but the purpose for which
the amount was paid could not be proved and therefore
the trial court rightly came to the conclusion that there is a
doubt whether the amount that was paid to the respondent
was towards illegal gratification. On these materials, the
c competent authority has formed the opinion in his order
dated 17.11.2008 that the suspension of the respondent ...
cannot be regarded as wholly unjustified and has declined •
to grant any salary and allowance to the respondent during
the period of suspension. This opinion of the competent
D
authority was a possible view on the materials which the
competent authority could form in the facts and
circumstances of the case while passing an order in
exercise of his powers under sub-rule (3) of F.R. 54-8,
declining to allow the salary and allowances of the
E respondent for the period of suspension.

11. Yet, the Tribunal has found fault with the order dated
17.11.2008 of the competent authority and has held that the r
suspension of the respondent was unjustified. The reasons
F given by the Tribunal in its order are that the prosecution has
failed to prove the case beyond reasonable doubt about the
demand and acceptance of the bribe and the criminal court has
acquitted the respondent and it was open for the authorities to
proceed against the respondent departmentally, but no such .. I
G departmental proceedings were initiated to prove the
misconduct of the respondent. The approach of the Tribunal,
in our considered opinion, was not correct. Sub-rule (3) of F.R.
54-B does not state that in case of acquittal in a criminal
proceedings the employee is entitled to his salary and
H allowances for the period of suspension. Sub-rule (3) of F.R.
~
- ~
GREATER HYDERABAD MUNICIPAL CORPORATION 605
v. M. PRABHAKAR RAO [A.K. PATNAIK, J.]
54-B also does not state that in such case of acquittal the A
employee would be entitled to his salary and allowances for the
period of suspension unless the charge of misconduct against
... him is proved in the disciplinary proceedings. Sub-rule (3) of
_. F.R. 54-B vests power in the competent authority to order that
the employee will be paid the full pay and allowances for the B
period of suspension if he is of the opinion that the suspension
of the employee was wholly unjustified. Hence, even where the
employee is acquitted of the charges in the criminal trial for lack
of evidence or otherwise, it is for the competent authority to
form its opinion whether the suspension of the employee was c
wholly unjustified and so long as such opinion of the competent
authority was a possible view in the facts and circumstances '
.> of the case and on the materials before him, such opinion of
the competent authority would not be interfered by the Tribunal
-"
or the Court.
D
12. In the result, we allow this appeal and set-aside the
order of the Tribunal and the impugned order of the High Court
and dismiss the original application filed by the respondent
before the Tribunal. There shall be no order as to costs.
E
R.P. Appeal allowed.

1