IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE FIRST DAY OF APRIL TWO THOUSAND AND TEN PRESENT THE HON'BLE MR JUSTICE A. GOPAL REDDY AND THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT APPEAL No.1928 of 2002 & WRIT PETITION No.8411 of 1999 WRIT APPEAL No. 1928 of 2002: BETWEEN The Chief General Manager, SBI, Hyderabad and two others. …APPELLANTS AND S. Krishna. …RESPONDENT Counsel for the Appellants: MR. K. SRINIVAS MURTHY Counsel for the Respondent: DR. K. LAKSHMI NARASIMHA WRIT PETITION No.8411 of 1999: BETWEEN S. Krishna. …PETITIONER AND The Chief General Manager and appointing authority, SBI, Hyderabad and another. …RESPONDENTS Counsel for the Petitioner: DR. K. LAKSHMI NARASIMHA Counsel for the Respondents: MR. K. SRINIVAS MURTHY The Court made the following: COMMON JUDGMENT: (per Hon’ble Sri Justice Vilas V. Afzulpurkar) The writ appeal is filed by the Management of State Bank of India (SBI) whereas the writ petition is filed by the employee, who was working as an Officer in SBI. While the appeal is directed against the order of the learned single Judge in WP.No.16291 of 1990 dated 23.08.2002 allowing the writ petition filed by the employee for declaring that the writ petitioner is entitled to subsistence allowance as per revised pay scales from 01.11.1987 till 19.11.1996 and the appellant bank was directed to pay the same after deducting the subsistence allowance, if paid, in the pre-revised scales. In the writ petition WP.No.8411 of 1999 filed by the employee he seeks a declaration that the action of SBI in not paying full salary for the period 05.05.9987 till 19.11.1996 as illegal, arbitrary and unconstitutional and consequently direct the SBI to pay the full salary for the above period with all consequential benefits. 2. For the sake of convenience the parties are referred to herein as the bank and the employee respectively. The facts, in brief, are as follows. 3. While the employee was working as Officer, Middle Management Grade II, on 04.05.1987 he was trapped by CBI authorities for demanding and accepting illegal gratification from the proprietor of M/s. Tirumala Enterprises as consideration for sanction of credit facilities. Based on the criminal offence registered against him by CBI, the employee was placed on suspension by order dated 06.05.1987. As per the service regulations of the bank under Rule 50A 7(i) and (iii) of the State Bank of India (Supervising Staff) Service Rules, he was paid subsistence allowance equal to half of his substantive salary plus half of dearness allowance and house rent allowance. Later after completing investigation, the CBI filed a charge sheet and the employee was tried by the Special Judge, CBI cases in C.C.No.17 of 1989 and by judgment dated 13.08.1990 he was found guilty and convicted of the charges. Based on the said conviction, an order of discharge was passed against him dated 05.03.1991 under Rule 10(1)(b)(i) of Banking Regulations read with Rule 50A 7(i) State Bank of India (Supervising Staff) Service Rules. In view of his discharge from service by order dated 05.03.1991 the bank did not pay subsistence allowance, as the contract of employment had come to an end on passing of the order of discharge. 4. The employee had preferred an appeal against the said conviction in CRLA.No.833 of 1993 before this Court. The said CRLA.No.833 of 1993 was, however, allowed by this Court on 26.10.1993 on the ground that the sanction for prosecution was invalid and consequently the conviction and sentence were quashed while preserving the liberty to the prosecuting agency to file a fresh charge sheet if it so chooses, on the same material, after obtaining a due order of sanction. Later a fresh charge sheet was filed and the employee was tried in C.C.No.14 of 1994. Meanwhile, the bank issued orders dated 19.11.1996 withdrawing the order of discharge dated 05.03.1991 and placed the employee on suspension with effect from the date of withdrawal of order of discharge i.e. 19.11.1996. The employee was again convicted in C.C.No.14 of 1994 on 02.04.1997 and the bank issued a fresh order of discharge dated 26.05.1997. The employee had preferred CRLA.No.402 of 1997 against conviction before this Court and by order dated 01.08.2003 the appeal was dismissed. 5. The employee contended that he is entitled to full salary from 05.05.1987 to 19.11.1996 i.e. from the date of suspension till the date of withdrawal of earlier discharge order and that in the meanwhile, the pay scales of the employees of the bank was revised with effect from 01.11.1987. However, the benefit of the revised pay scales was not given to the employee based upon the circular of the bank No. PER: IR: 40 dated 05.12.1989. Therefore, the employee filed WP.No.16291 of 1990 seeking a Mandamus to declare the clause 3(i) of the aforesaid circular as illegal and unconstitutional and sought direction against the bank to pay subsistence allowance to the employee in the revised pay scales from 06.05.1987 onwards. By the impugned order of the learned single Judge the said writ petition has been allowed. Questioning the same, the bank has preferred an appeal in WA.No.1928 of 2002. The employee also filed WP.No.8411 of 1999 seeking full salary for the period 05.05.1987 to 19.11.1996 by contending that (a) the initial suspension order of 05.05.1987 got merged in the earlier discharge order dated 05.03.1991 and (b) the said discharge order having been withdrawn by the bank by order dated 19.11.1996, the employee continues to be in service for the period 05.05.1987 to 19.11.1996 and is entitled to full salary. 6. Since both these matters are interconnected, We had heard the learned counsel for the appellant and the respondent on 23.02.2010 and posted these matters for judgment on 24.02.2010. Thereafter, on request by the learned counsel for the employee, We had adjourned the matters twice to enable the learned counsel to get fresh instructions with regard to another writ petition being WP.No.13229 of 2001 filed by the employee questioning the second discharge order dated 26.05.1997. On 05.03.2010, We had ascertained from the Registry that the other writ petition WP.No.13229 of 2001 filed by the employee questioning the subsequent discharge order dated 26.05.1997 was dismissed as withdrawn on 22.04.2002 and when we were about to dispose of these matters, the learned counsel for the employee once again sought time stating that he was in hospital and that further instructions were required. We had, therefore, adjourned the matters and heard these matters subsequently on 01.04.2010. 7. Learned counsel for the employee contended that the order of suspension dated 05.05.1987 ceased to have effect and merges with the earlier discharge order dated 05.03.1991. When the said order of discharge dated 05.03.1991 was withdrawn by the bank by order dated 19.11.1996, it cannot be said that there is any suspension operative from 05.05.1987. Moreover, the bank had placed the employee under suspension afresh on 19.11.1996, which presupposes that he was not on suspension prior thereto. The employee, therefore, seeks full salary for the period 05.05.1987 to 19.11.1996 on the ground that there was no order of suspension operative during the aforesaid period. Learned counsel also submits that the initial order of discharge dated 05.03.1991 was based upon the conviction of the employee in the first instance in C.C.No.17 of 1989 dated 13.08.1990 and when the said conviction was set aside by this Court while allowing CRLA.No.833 of 1990 dated 26.10.1993 a fresh order of discharge dated 05.03.1991 ceases to have any basis. 8. Learned counsel for the bank, on the contrary, submits that as per the regulations of the bank it is for the disciplinary authority to pass final orders regulating the period of suspension and when the second discharge order was passed on 26.05.1997 the bank had specifically stated that the period spent on suspension is treated as not on duty. The said discharge order dated 26.05.1997 was questioned by the employee in WP.No.13229 of 2001 and the same was dismissed as withdrawn by order of this Court dated 22.04.2002. The said order of the disciplinary authority treating the period of suspension as not on duty has, therefore, attained finality and the relief sought for by the employee in WP.No.16291 of 1990 impugned in this writ appeal does not survive. 9. Rule 50A of the State Bank of India (Supervising Staff) Service Rules provides for the power of the disciplinary authority to place an employee under suspension and sub-rule 7(i) provides that during the suspension he shall be entitled to subsistence allowance equal to half of his substantive salary and such other allowances, as the authority may decide. Sub-rule 8(i) provides that when the employee is exonerated or if the suspension is unjustifiable, the employee shall be granted the full pay to which he would have been entitled had he not been so suspended, together with any allowance, which he was receiving prior to suspension or sanctioned subsequently and made applicable to all employees. The period of absence from duty in such a case shall, for all purposes, be treated as period spent on duty. Sub-Rule 8(ii), however, relates to the case on hand, which is extracted hereunder: “8(ii) In all cases other than those referred to in clause (i) above and where the employee has not been subjected to the penalty of dismissal, the period spent under suspension shall be dealt with in such a manner as the Disciplinary Authority may decide and the pay and allowances of the employee during the period adjusted accordingly.” 10. It would be clear from the above that, in cases, which do not fall under sub-rule 8(i) above, it is for the disciplinary authority to regulate the period of suspension. While passing the order of discharge dated 26.05.1997 based on the later conviction of the employee in C.C.No.14 of 1994 dated 02.04.1997, the disciplinary authority had specifically stated in the said order that the period of suspension shall not be treated as on duty and accordingly, he was not eligible for any back wages and he was not paid any salary or allowance during the said period apart from what has already been paid by way of subsistence allowance. The said order though challenged by the employee in WP.No.13229 of 2001,the said challenge was withdrawn and the said writ petition was dismissed on 22.04.2002. Consequently, the order of discharge dated 26.05.1997 has attained finality. By the aforesaid order the entire period of suspension was treated as ‘not on duty’ and consequently, it was stipulated in the order that the employee shall not be entitled to any salary, pay, allowances whatsoever. The said order, therefore, covers the suspension period right from 05.05.1987 onwards and as such, the contention of the learned counsel for the employee seeking full salary for the period 05.05.1987 to withdrawal of the earlier discharge order dated 19.11.1996 is clearly unsustainable. The finality attached to the discharge order dated 26.05.1997, therefore, cannot be wished away by the employee and as such, the relief sought for in WP.No.8411 of 1999 is clearly misconceived. In fact, the employee also has made it clear in Para 4 of his affidavit that so far as period from 19.11.1996 is concerned, the employee is filing a separate writ petition and obviously, such a statement refers to the relief sought for in the subsequent writ petition being WP.No.13229 of 2001, which was directed against the discharge order dated 26.05.1997 as well as consequential relief for treating the period of suspension as on duty for all purposes. The said writ petition having been dismissed, WP.No.8411 of 1999 is liable to be dismissed. 11. So far as the writ appeal is concerned, in WP.No.16291 of 1990 the employee had sought a declaration that clause 3(i) of Circular No. PER: IR: 40 dated 05.12.1989 be declared unconstitutional. The said clause 3(i) of the circular is as follows: “Officers under suspension: For officers in whose case the date of suspension is prior to the date of salary revision i.e. 01.11.1987, there will be no change in the subsistence allowance arising out of the salary revision, unless the Disciplinary authority has taken a final view and the period under suspension treated as on duty. However, where an officer was placed under suspension on or after 01.11.1987, his fitment in the revised scales may be done s on 01.11.1987: consequently, the subsistence allowance payable to him may also be recalculated on the basis thereof and resultant arrears of salary and subsistence allowance paid to him.” 12. The contention of the employee was that there is discrimination among the employees, who are placed on suspension prior to 01.11.1987, the date of enforcement of revised pay scales, and the other employees, who are placed on suspension after 01.11.1987. While the learned single Judge had not declared the aforesaid clause as unconstitutional, a Mandamus was issued holding that the employee is entitled to subsistence allowance as per revised pay scales with effect from 01.11.1987 though his suspension was prior to 01.11.1987. In view of our findings in the writ petition, referred to above, that the subsequent discharge order having declared the period of suspension as not on duty, the question involved in this appeal really does not survive. Though the learned counsel on either side made submissions on the correctness of the view under the impugned judgment, We find that even the learned single Judge had not declared the impugned clause 3(i) of the circular as unconstitutional. Without declaring the said clause as unconstitutional, the relief as sought for by the employee could not have been granted in the writ petition. Further, the said decision of the learned single Judge is based upon a judgment of the Hon’ble Supreme Court in D.S. NAKARA v. UNION OF INDIA (AIR 1983 SC 130). It is also to be noted that in the subsequent decision of the Supreme Court in GOVERNMENT OF ANDHRA PRADESH v. N. SUBBARAYUDU[1] the authority in NAKARA’s case has been explained and distinguished as under: “No doubt in D.S. Nakara & Ors. vs. Union of India [1983 (1) SCC 305] this Court had struck down the cut off date in connection with the demand of pension. However, in subsequent decisions this Court has considerably watered down the rigid view taken in Nakara’s Case (supra), as observed in para 29 of the decision of this Court in State of Punjab vs. Amar Nath Goyal [(2005) 6 SCC 754]” It has been laid down that effective date fixed in the said circular cannot be said to be arbitrary as it has nexus with the policy of the State. Even otherwise, it cannot be said that the policy of the bank in extending the benefit of revised scales of pay only to such employees, who are suspended after enforcement of revised pay scales, is discriminatory. Thus, even otherwise, the impugned order of the learned single Judge cannot be upheld. The writ appeal, accordingly, deserves to be allowed. In the result, WP.No.8411 of 1999 stands dismissed and WA.No.1928 of 2002 stands allowed. However, there shall be no order as to costs. _______________ A. GOPAL REDDY, J _____________________ VILAS V. AFZULPURKAR, J April 1, 2010 DSK [1] (2008) 14 SCC 702