IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 29/04/2004 Coram The Honourable Mr.Justice F.M.IBRAHIM KALIFULLA W.P.No.36399 of 2002 and W.P.M.P. No.1966 of 1997 P.Surya Rao .. Petitioner -vs- 1. Oil & Natural Gas Corporation Ltd., rep. by its Chairman-cum-Managing Director, Jeevan Bharathi, Tower-II, 124, Indira Chowk, New Delhi-110 001. 2. The Director (Technical), Oil & Natural Gas Corporation Ltd., Tel Bhavan, Dehradun-248 003. Uttaranchal. 3. The Manager (P&A) TS, Office of the Technical Services Establishment ONGC SEHD No.5, Tel Bhavan, Dehradun-248 003, Uttaranchal. 4. The Regional Director, ONGC Limited, SRBC Regional Office, CMDA Towers, No.1, Gandhi Irwin Road, Egmore, Chennai-8. .. Respondents Petition under Article 226 of the Constitution of India praying to issue a writ of certiorarified Mandamus for the reasons as stated therein. For Petitioner : Ms.R.Vagai For Respondent : Mr.R.Thiagarajan, SC for M/s.Sarvabhauman Associates for R1 to R4 :ORDER The petitioner is aggrieved against the order of the third respondent dated 4-9-2002 in proceedings No.47/335/80/91-TBG dated 4-9-2002, wherein, the third respondent, while ordering reinstatement of the petitioner with effect from the date of joining of the service in Oil and Natural Gas Corporation Limited (in short 'ONGC') imposed certain conditions. The petitioner, therefore, seeks for setting aside the said order and consequently to direct the respondents to reinstate him with continuity of service with full arrears of salary, allowances and all other attendant benefits including promotion as Superintending Engineer, Chief Engineer and Deputy General Manager in the years 199 4, 1997 and 2000 respectively with due seniority over his juniors. 2. The petitioner joined the services of ONGC as Assistant Executive Engineer on 23-8-1980. He was promoted as Executive Engineer in the year 1985. He was subsequently promoted as Deputy Superintending Engineer in the year 1990. By an order dated 1-12-1990, he was kept under suspension due to vigilance enquiry on the allegation of ' corruption'. By a separate order dated 20-2-1991, the petitioner was directed to attend Office and sign attendance during the period of suspension. Subsequently on 30-10-1991, the suspension was revoked and the petitioner was allowed to perform his work. It is stated that the Central Bureau of Investigation sought for the sanction of the Disciplinary Authority to prosecute the petitioner for the offences punishable under the provisions of the Prevention of Corruption Act. On 14-12 -1993, the petitioner made a representation to the first respondent explaining his assets and sources and also requesting him not to grant sanction to the Central Bureau of Investigation. By proceedings dated 24-12-1994, the second respondent herein, accorded sanction under Sections 19(i)(c) of the Prevention of Corruption Act 1988 for prosecution of the petitioner for the offences punishable under Sections 13 (2) read with 13(1)(e) of the Prevention of Corruption Act, 1988 or any other offences punishable under other provisions of law on the ground that there were enough material to suggest that the petitioner acquired disproportionate assets to his income. In the mean time, there was a Departmental Promotion Committee, in which, the promotion of the petitioner for the post of Superintending Engineer (Civil), (E4) level was considered and the result of the promotion was kept under a sealed cover, while his juniors were promoted. 3. The criminal case ended in conviction on 1-7-1996 in Calendar Case No.4 of 1994. The petitioner preferred a Criminal Appeal in C.A. No.552 of 1996 before the High Court of Andhra Pradesh. The said appeal was allowed on 7-11-2001 holding that the charge of corruption levelled against the petitioner was not proved. In the mean time, based on the conviction made by the Special Judge, Visakhapatnam in C.C. No.4 of 1994 dated 1-7-1996, the petitioner was issued with a show cause notice by the Disciplinary Authority on 27-8-1996 calling upon the petitioner to explain as to why a provisional conclusion to impose the penalty of dismissal should not be made. Though the petitioner challenged the said notice in W.P.No.14059 of 1996, this Court declined to interfere with the said show cause notice and the Writ Petition came to be dismissed on 15-4-1999. 4. The petitioner is stated to have submitted his reply on 14-5-19 99 requesting the Disciplinary Authority, not to pass the 'order of dismissal', but to await the result of the Criminal Appeal. However, by order dated 30-7-1999, the petitioner was dismissed from the service of the first respondent. 5. As against the said order of the dismissal, the petitioner is stated to have filed an appeal which was also rejected on 2-2-2000 by the Appellate Authority. After the petitioner got acquitted in Criminal Appeal No.552 of 1996 on 7-11-2001 and after receiving the copy of the said order on 18-12-2001, he made a representation on 19-12-2001 to the first respondent for his reinstatement with all other benefits. Since, the said representation was not considered, it is stated that several reminders were made on 9-1-2002, 21-1-2002, 5-2-2002, 13-2-2002 and 20-3-2002. Ultimately, the impugned order came to be passed on 4-9-2002 stating that the reinstatement order was subject to the condition of joining, that there would be no benefits for the intervening period, that the said period would be treated as 'dies-non', hence there would be no career growth, that his pay fixation would be made afresh without any increment, that his postings would be at Assam and that the petitioner should accept the said order within 21 days or otherwise, it would be treated as though he was not interested in joining duty. The petitioner received the said order dated 7-9-200 2 and is stated to have sent a reply on 11-9-2002 requesting the respondents to reinstate with all consequential benefits and also to be posted at Chennai. He also sent a reminder on 18-9-2002 and since there was no reply, the petitioner came forward with the present Writ Petition, in which, an interim order was passed on 23-9-2002 restraining the respondents from denying reinstatement to the petitioner as Deputy Superintending Engineer at the Southern Region Business Centre, Regional Office at Chennai at current salary levels without imposing conditions (ii) to (vi) in the order dated 4-9-2002 issued by the third respondent. Subsequently, the said order was modified by orders dated 28-10-2002 and 5-11-2002 virtually directing the respondents to reinstate the petitioner and that the petitioner should report at Assam. 6. By virtue of the interim order, while the first respondent was directed to release all the emoluments for which, the petitioner would be entitled to receive from the month of December 2001 till the date of his reinstatement and also continue to pay him his future emoluments in accordance with the existing procedure, the petitioner had not been paid his wages from 30-7-1999 and that his promotions to the post of Superintending Engineer and the subsequent promotions were also not considered. Further the benefits payable to the petitioner during which period the petitioner was kept under suspension i.e. from 1-12-1990 to 30-10-1991 were also not paid. 7. While assailing the order impugned in this Writ Petition, Ms.R. Vaigai, learned counsel appearing for the petitioner, placed reliance upon Regulation 14.3 of the Oil and Natural Gas Commission (Pay and Allowances) Regulations, 1972 (As amended from time to time, up to 31-12-1987). The said Regulation 14.3(a) reads as under: "14.3. (a) When an employee, who had been dismissed, removed, compulsorily retired or suspended, is reinstated or would have been reinstated but for his retirement on superannuation while under suspension, the authority competent to order the reinstatement shall consider and make a specific order:- (i) regarding the pay and allowances to be paid to the employee for the period of his absence from duty or for the period of suspension ending with the date of his retirement on superannuation, as the case may be, and (ii) whether or not the said period shall be treated as a period spent on duty. (b) Where the authority mentioned in Clause(a) above is of the opinion that the employee has been fully exonerated or, in the case of suspension, that it was wholly unjustified, the employee shall be given the full pay and allowances to which he would have been entitled had he not been dismissed, removed, compulsorily retired or suspended, as the case may be. (c) In other cases, the employee shall be given such proportion of such pay and allowances as such competent authority may specify in this behalf; Provided that the payment of allowance under clause (b) or clause (c) shall be subject to all other conditions under which such allowances are admissible. Provided further that such proportion of such pay and allowances shall not be less than the subsistence grant admissible under these regulations. (d) In a case falling under Clause (b), the period of absence from duty shall be treated as a period spent on duty for all purposes. (e) In a case falling under clause (c), the period of absence from duty shall not ber treated as a period spent on duty, unless such competent authority specifically directs that it shall be so treated for any specified purpose:- Provided that if the employee so desires, such authority may direct that the period of absence from duty shall be converted into leave of any kind due and admissible to the employee. 1. The order of the competent authority regarding the treatment of the period of absence from duty passed under this proviso is absolute and no higher sanction would be necessary for the grant of extraordinary leave in excess of three months in so far as temporary employee are concerned. 2. In the case of persons who are not fully exonerated, the conversion of the period of suspension into leave with or without allowance has the effect of removing the stigma of suspension and all the adverse consequences following therefrom. The moment the period of suspension is converted into leave, it has the effect of vacating the order of suspension and it will be deemed not to have been passed at all. Therefore, if it were found that the total amount of subsistence grant of compensatory allowances that an employee received during the period of suspension exceeds the amount of leave salary and allowances, the excess will have to be refunded and there is no escape from the conclusion. 3. The competent authority has the discretion to pay proportionate and allowances and teat the period as duty for any specified purpose or only to pay proportionate pay and allowances. It has no discretion to pay full pay and allowances when the period is treated as 'not on duty'." 8. The learned counsel also drew the attention of this Court to the judgment of the Andhra Pradesh High Court in Criminal Appeal No.552 of 1996, wherein, it was held as under: "In the present case, the Court blow has failed to take into consideration certain amounts, which the appellant had claimed as additional income and in view of perusal of the entire record, I am of the opinion that the additional incomes which the appellant had claimed, are eligible to be taken into consideration and further as per the evidence of the investigating officer PW.15, he has admitted in unequivocal terms that even though the appellant had stated regarding the interest accrued on the fixed deposit of Rs.41,500/-, he has not recorded the same. Further the accused who was examined as D.W.1 also has categorically stated with regard to this amount and there is admittedly no cross-examination on this aspect. Further even though there is evidence to show that the father-in-law of the appellant bore the expenditure for engineering education of the eldest son of the appellant, the court below failed to consider the same and further the Court below misread Ex.P-11 as Ex.D-11 and thereby landed in a wrong reasoning. Therefore, in my view, the appellant has discharged the burden satisfactorily regarding accounting for his possession of disproportionate assets. Hence, I am of the view that the judgment cited by the learned counsel for the prosecution is of no use and not relevant to the facts of the present case and as such in applicable. For the foregoing reasons, I pass the order as under: The impugned judgment is set aside and the appeal is accordingly allowed. The fine amount of Rs.15,000/- paid by the accused shall be refunded and the bail bonds executed by him shall stand cancelled." 9. In the light of the said order of the High Court, as well as Regulation 14.3, the learned counsel submitted that the petitioner has been honourably acquitted in the criminal case giving a clean chit and therefore, the second respondent who was the Disciplinary Authority was bound to accept the said verdict without any demur, reinstate the petitioner and grant all the benefits which would have otherwise accrued to him, but for the suspension, which came to be made on 1-12-19 90 and also the order of dismissal dated 30-7-1999. In other words, while reinstating the petitioner, the petitioner should have got the restoration of his service right from 1-12-1990 inclusive of the promotions which he would have otherwise gained with all other monetary benefits payable to the petitioner. According to the learned counsel, this was not a case where the petitioner was involved in a criminal offence unconnected to his employment in order to state that there was any scope for the respondents to deny any part of the benefits which the petitioner would have otherwise entitled to, had he been continued in employment without being suspended and dismissed on the ground of the criminal prosecution as and from 1-12-1990. 10. It was further submitted that by virtue of Regulation 14(3)(a)(b) and (d), the competent authority ought to have fairly accepted the honourable acquittal as having fully exonerated the petitioner and treated the period of 'absence from duty' as a 'period spent on duty' for all purposes. It was therefore, contended that the impugned order depriving the petitioner all such benefits for which he is otherwise entitled to, is liable to be set aside and the respondents be directed to confer all the benefits. 11. In support of the above submissions, reliance was placed upon the Judgment reported in "1994 Supp (3) SCC 674 (SULEKH CHAND versus COMMISSIONER OF POLICE AND OTHERS)", wherein the Hon'ble Supreme Court has held as under in para 2: "2. ..... The judgment acquitting the appellant of the charge under Section 5(2) became final and it clearly indicates that it was on merits. Therefore, once the acquittal was on merits the necessary consequence would be that the delinquent is entitled to reinstatement as if there is no blot on his service and the need for the departmental enquiry is obviated. It is settled law that though the delinquent official may get an acquittal on technical grounds, the authorities are entitled to conduct departmental enquiry on the selfsame allegations and take appropriate action. But, here, as stated earlier, the acquittal was on merits. The material on the basis of which his promotion was denied was the sole ground of the prosecution under Section 5(2) and that ground when did not subsist, the same would not furnish the basis for DPC to overlook his promotion. We are informed that the departmental enquiry itself was dropped by the respondents. Under these circumstances, the very foundation on which the DPC had proceeded is clearly illegal. The appellant is entitled to the promotion with effect from the date his immediate junior was promoted with all consequential benefits. The appeals are allowed. No costs." 12. In the judgment reported in "1999(3) SCC 679 (CAPT.M. PAULANTHONY versus BHARAT GOLD MINES LTD. AND ANOTHER)", the Hon'ble Supreme Court has held as under in paragraphs 34: "34. .... The whole case of the prosecution was thrown out and the appellant was acquitted. In this situation, therefore, where the appellant is acquitted by a judicial pronouncement with the finding that the "raid and recovery" at the residence of the appellant were not proved, it would be unjust, unfair and rather oppressive to allow the findings recorded at the ex parte departmental proceedings to stand." 13. In the judgment reported in "1984 (2) SCC 433 (BRAHMA CHANDRA GUPTA versus UNION OF INDIA)", where also, dismissal came to be made pursuant to the conviction in the Criminal Court and which conviction was subsequently set aside in the appeal, the Hon'ble Supreme Court has held as under in para 6. "6. Mr.R.K.Garg, learned counsel for the appellant wanted us to examine the scope and ambit of Article 193 and Mr.Gujaral learned counsel for the Union of India was equally keen on the other side to do the same thing. We steer clear of both. The appellant was a permanent UDC who has already retired on superannuation and must receive a measure of socio-economic justice. Keeping in view the facts of the case that the appellant was never hauled up for acquitted, and on being acquitted he was reinstated and was paid full salary for the period commencing from his acquittal and further that even for the period in question the concerned authority has not held that the suspension was wholly justified because three-fourth of the salary is ordered to be paid, we are of the opinion that the approach of the trial cour was correct and unassailable. The learned trial Judge on appreciation of facts found that this is a case in which full amount of salary should have been paid to the appellant on his reinstatement for the entire period. We accept that as the correct approach. We accordingly allow this appeal, set aside the judgment of first appellate court as well of the High Court and restore the one of trial court with this modification that the amount decree shall be paid with 9 per cent interest p.a. From the date of suit till realisation with costs throughout." 14. The learned counsel also placed reliance upon certain other judgments wherein, it was held how the withheld promotions should be subsequently considered. Reliance was also placed upon "AIR 1997 SC 180 2 (RANCHHODJI CHATURJI THAKORE versus SUPERINTENDENT ENGINEER, GUJARAT ELECTRICITY BOAD, HIMMATNAGAR (GUJARAT) AND ANOTHER); 1999(5) SCC 7 62 (BANK OF INDIA AND ANOTHER versus DEGALA SURYANARAYANA); 1991(2) SCC 335 (BABU LAL versus STATE OF HARYANA AND OTHERS); 1994(1) SCC 541 (MANAGEMENT OF RESERVE BANK OF INDIA, NEW DELHI versus BHOPAL SINGH PANCHAL); 1997(6) SCC 282 (BIR SINGH CHAUHAN versus STATE OF HARYANA AND ANOTHER) and 2002(8) SCC 385. 15. As against the above submissions made on behalf of the petitioner, Sri R.Thiagarajan, learned senior counsel appearing for the respondents, at the outset, fairly stated that 'the ONGC Pay and Allowances Regulations are applicable to the petitioner. However, according to the learned senior counsel, Regulation 14(3) in particular, clause (b) of said Regulation will have no application to the case on hand as according to the learned senior counsel, the said clause (b) will apply only to a case where a delinquent was proceeded against by way of departmental proceedings which ultimately ended in the imposition of the capital punishment of dismissal. The learned senior counsel would contend that where the punishment came to be imposed by virtue of Regulation 41 of the 'ONGC Conduct, Discipline and Appel Regulations 1976, which provide 'Special Procedure in Certain Cases', where a penalty is imposed on an employee on the ground of conduct which has led to his conviction on a criminal charge, then Regulation 14(3)(b) cannot be applied. In furtherance of the said submission, the learned senior counsel relied upon "2004(1) SCC 121 (UNION OF INDIA AND OTHERS versus JAIPAL SINGH); AIR 1997 SC 1802 (RANCHHODJI CHATURJI THAKORE versus SUPERINTENDENT ENGINEER, GUJARAT ELECTRICITY BOARD, HIMMATNAGAR(GUJARAT) AND ANOTHER); 1997(3) SCC 636 (KRISHNAKANT RAGHUNATH BIBHAVNEKAR) and 2004(1) SCC 43 (UNION OF INDIA versus MADHUSUDAN PRASAD)". 16. In "2004(1) SCC 121 (UNION OF INDIA AND OTHERS versus JAIPAL SINGH)", an earlier dictum of the Hon'ble Supreme Court in `RANCHHODJI CHATURJI THAKORE versus SUPERINTENDENT ENGINEER, GUJARAT ELECTRICITY BOARD, HIMMATNAGAR(GUJARAT) AND ANOTHER" reported in (1996) 11 SCC 6 03' was followed and it was held as under in paragraphs 4 and 5: "4. ..... On going through the same, we are in respectful agreement with the view taken in Ranchhodji (1996) 11 SCC 603. If prosecution, which ultimately resulted in acquittal of the person concerned was at the behest of or by the department itself, perhaps different considerations may arise. On the other hand, if as a citizen the employee or a public servant got involved in a criminal case and if after initial conviction by the trial Court, he gets acquittal on appeal subsequently, the department cannot in any manner be found fault with for having kept him out of service, since the law obliges a person convicted of an offence to be so kept out and not to be retained in service. Consequently, the reasons given in the decision relied upon, for the appellants are not only convincing but are in consonance with reasonableness as well. Though exception taken to that part of the order directing reinstatement cannot be sustained and the respondent has to be reinstated in service, for the reason that the earlier discharge was on account of those criminal proceedings and conviction only, the appellants are well within their rights to deny back wages to the respondent for the period he was not in service. The appellants cannot be made liable to pay for the period for which they could not avail of the services of the respondent. The High Court, in our view, committed a grave error, in allowing back wages also, without adverting to all such relevant aspects and considerations. Consequently, the order of the High Court insofar as it directed payment of back wages is liable to be and is hereby set aside. "5. The respondent will be entitled to back wages from the date of acquittal and except for the purpose of denying the respondent actual payment of back wages, that period also will be counted as period of service, without any break. The reinstatement, if not already done, in terms of the order of the High Court will be done within thirty days from today." 17. In the judgment reported in "1997(3) SCC 606 (KRISHNAKANT RAGHUN BIBHAVNEKAR versus STATE OF MAHARASHTRA AND OTHERS)", the Hon'ble Supreme Court has held as under in para 4: "4. ..... The very cause for suspension of the petitioner and taking punitive action against him was his conduct that led to his prosecution for the offences under the Indian Penal Code. If the conduct alleged is the foundation for prosecution, though it may end in acquittal on appreciation or lack of sufficient evidence, the question emerges whether the government servant prosecuted for commission of defalcation of public funds and fabrication of the records, though culminated into acquittal, is entitled to be reinstated with consequential benefits. In our considered view this grant of consequential benefits with all back wages etc. cannot be as a matter of course. We think that it would be deleterious to the maintenance of the discipline if a person suspended on valid considerations is given full back wages as a matter of course on his acquittal. Two courses are open to the disciplinary authority, viz., it may enquire into the misconduct unless, the selfsame conduct was subject of charge and on trial the acquittal was recorded on a positive finding that the accused did not commit the offence at all; but acquittal is not on benefit of doubt given. Appropriate action may be taken thereon. Even otherwise, the authority may, on reinstatement after following the principle of natural justice, pass appropriate order including treating suspension period as period of not on duty (and on payment of subsistence allowance etc.). Rules 72(3), 72(5) and 72(7) of the Rules give discretion to the disciplinary authority. Rule 72 also applies, as the action was taken after the acquittal by which date the Rule was in force. Therefore, when the suspension period was treated to be a suspension pending the trial and even after acquittal, he was