Supreme Court of India
Hukmi Chand vs Jhabua Cooperative Central Bank Ltd., ... on 1 October, 1997
Equivalent citations: [1998(79)FLR743], JT1998(4)SC233, (1998)2SCC291, AIRONLINE 1997 SC 80, 1998 SCC (L&S) 509, (1998) 4 SCT 297, 1998 (2) SCC 291, (1998) 2 LAB LJ 258, (1998) 79 FAC LR 743, (1998) 2 CUR LR 230, (1998) 1 BANK CLR 626, (1999) 2 BANK LJ 7, (1998) 4 JT 233, (1998) 4 JT 233 (SC)
Bench: Sujata V. Manohar, D.P. Wadhwa
ORDER
1. The appellant was employed as a Supervisor with the first respondent, Jhabua Cooperative Central Bank Ltd., Jhabua, Madhya Pradesh. With effect from 1-4-1976, he was also put in charge of supervising the affairs of Adimjati Sewa Sahakari Sanstha Maryadit, Kalyanpura, as he was posted as a Supervisor in Kalyanpura Branch of Respondent 1-Bank from the year 1974. From September 1976, he was relieved of the additional duties of supervising affairs of Adimjati Sewa Sahakari Sanstha Maryadit, Kalyanpura. He, however, continued as Supervisor of Kalyanpura Branch of Respondent 1-Bank. In 1976, certain irregularities in distribution of sugar were detected while examining the working of Adimjati Sewa Sahakari Sanstha Maryadit, Kalyanpura. The appellant along with one Meghraj was charge-sheeted in Criminal Case No. 1197 of 1977, The appellant was convicted and sentenced to rigorous imprisonment for one year and a fine of Rs. 1000 for offence under Section 3 read with Section 7 of the Essential Commodities Act. The order of conviction is dated 12-1-1978. The appellant preferred an appeal being Criminal Appeal No. 8 of 1978. The appeal was, however, dismissed. The appellant preferred a revision before the High Court which was allowed by the High Court by its order dated 5-9-1979 on the ground that the prosecution had failed to prove the charge against the appellant.
2. In the meanwhile, on account of conviction of the appellant under the order of 12-1-1978, Respondent 1, by its order dated 4-2-1978, terminated the services of the appellant under Rule 49(i) of the Cooperative Central Bank Employees Rules, 1977. On account of the ultimate acquittal of the appellant by the order of the High Court dated 5-9-1979, the appellant was reinstated in service by the first respondent-Bank under an order dated 17-9-1979. Back wages were not, however, granted to the appellant. The representation of the appellant for payment of back wages was rejected. The appellant filed a writ petition before the Madhya Pradesh High Court on 6-3-1978 challenging the order of dismissal and also the vires of Rule 49(i). The writ petition has been dismissed by the High Court. Hence the present appeal.
3. Under the Madhya Pradesh Cooperative Societies Act, 1960, Section 55(1) provides as follows:
"55. (1) The Registrar may, from time to time, frame rules governing the terms and conditions of employment in a society or a class of societies and the society or the class of societies to which such terms of employment are applicable shall comply with the order that may be issued by the Registrar in this behalf."
4. Pursuant to the power given to the Registrar under this section, the Registrar has framed Rules relating to the terms of employment and service conditions of employees of Cooperative Central Bank in M.P. Chapter XI of these Rules deals with disciplinary action. Rule 49 which forms a part of this chapter is as follows:
"49(0 If an employee is arrested on any criminal charge the President shall order his suspension from the date of arrest and may allow suspension allowance provided in the rules, during the period of enquiry. After the completion of enquiry his salary and allowances may be determined in accordance with the nature of the case against him and it may also be determined whether to treat him on duty or leave during the period of suspension. If the employee be found not guilty of all charges leveled against him, the Bank may consider whether to pay him for the suspension period full salary and allowance admissible to him or to treat him on duty during that period. If an employee is convicted and sentenced for any offence by jail sentence his services shall be deemed to have been terminated and in such a case it will not be necessary to give him a charge-sheet for the absence from duty.
(ii) When the sentence awarded by a lower court is set aside by a superior court and the employee is honourably acquitted he may be reinstated in the service of the Bank without any back wages, unless otherwise stated in the order.
(iii) * * *"
5. In the present case, on the conviction of the appellant sentencing him to rigorous imprisonment for one year and a fine of Rs. 1000, his services were deemed to have been terminated under Rule 49(i) and he was accordingly dismissed from service. But on account of his ultimate acquittal in revision, he was reinstated by virtue of Rule 49(ii)- However, he was not granted any back wages. Learned counsel for the appellant contends that Rule 49 is arbitrary because it provides for termination of services without a departmental enquiry and hence is in violation of principles of natural justice. Rule 49(0 is, however, confined only to those cases where the employee is convicted and sentenced for an offence by a sentence of imprisonment. It presumes a proper trial and a judicial conviction of the employee where the employee has a full right to defend himself in accordance with law. In view of such trial and conviction, a separate departmental enquiry has been considered unnecessary. We fail to see how this can be considered in violation of the principles of natural justice.
6. The second contention of the appellant relates to Rule 49, Sub-rule (ii) which provides that if ultimately the sentence awarded by a lower court is set aside by a superior court and the employee is acquitted, he is required to be reinstated in service. The appellant contends that this rule further provides that he is to be reinstated without any back wages unless otherwise stated in the order of reinstatement. This, according to the appellant, is a fetter on the power of the employer to award back wages to the employee and hence this rule is arbitrary. He contends that if the employee is reinstated, there should be provision for grant of back wages also. In the absence of such a provision, according to him, Sub-rule (ii) is arbitrary. We fail to see any such fetter as contended by the appellant. Under Sub-rule (ii), there is a clear implied power to order back wages if the employer considers it appropriate looking to the facts and circumstances of a given case. All that the rule provides is that the order must state that such back wages are being granted. In the absence of an order specifying the grant of back wages, the reinstatement will not automatically entitle an employee to back wages. The right to reinstatement on acquittal, therefore, does not carry with it, by necessary implication, a right to back wages under Rule 49(ii). But the employer has the discretion to grant back wages. Such a "fetter" if at all it is a fetter, cannot be considered as arbitrary, in view of the fact that the termination of services under Sub-rule (i) of Rule 49 is on conviction. During the pendency of an appeal, the conviction is not obliterated. However, on acquittal, Sub-rule (ii) provides for reinstatement. The grant of back wages, in these circumstances, will obviously depend upon the facts and circumstances of each case, especially because in the interregnum, the employee does not work with the employer on account of a valid termination of service.
7. It is also contended by the appellant that in his case, not awarding of back wages is unjustified and the order of reinstatement ought to have granted him back wages. The grant of back wages under Sub-rule (ii) is at the discretion of the employer. In the present case looking to the fact that both the trial court as well as the appellate court have convicted the appellant and it was only in revision that he was acquitted on the ground that the prosecution had failed to prove the charges, if the employer, after taking into account all relevant circumstances, decides not to grant back wages to the appellant, such exercise of discretion cannot be considered as totally unreasonable requiring our intervention at this stage, It is to be noted that the appellant was reinstated immediately after the order of acquittal.
8. We, therefore, do not see any reason to set aside the impugned judgment and order of the High Court. The appeal is, therefore, dismissed. However, there will be no order as to costs.