IN THE HIGH COURT OF JUDICATURE AT PATNA LPA No.491 of 2010 1. The Bihar State Electricity Board through its Secretary, Vidyut Bhawan, Bailey Road, Patna 2. The Chairman, Bihar State Electricity Board, Vidyut Bhawan, Bailey Road, Patna. 3. The Secretary, Bihar State Electricity Board, Vidyut Bhawan, Bailey Road, Patna. 4. The Joint Secretary, Bihar State Electricity Board, Vidyut Bhawan, Bailey Road, Patna. ………Respondents-Appellants Versus GANGA KUMAR SRIVASTAVA, son of Late Uma Charan Prasad, Post of General Manager-cum-Chief Engineer, Mithila Area Board, Darbhanga, resident of Village-Asthua, P.S.- Singhwara, District- Darbhanga at present Shiva Puram, Near I.B.P. Petrol Pump, Bailey Road, Patna, P.S.-Shastrinagar, District- Patna. ……..Petitioner-Respondent For the Appellants : Sri. Lalit Kishore, Sr. Adv. : Sri. Piyush Lall, Adv. For the Respondent : Sri. Chittaranjan Sinha, Sr. Adv. : Sri. Vivek Prasad, Adv. : Sri. Ashok Kumar, Adv. : Sri. Prabhat Ranjan-I ----------- 05. 13.04.2010 We have heard learned counsel for the appellants and learned counsel for the respondents. The appellant is aggrieved by order dated 17.08.2009 passed in C.W.J.C. No. 8015 of 2009 preferred by the respondent directing grant of back wages for the period 31.07.2000 to 20.07.2005. The respondent was dismissed from service on 31.07.2000 consequent to his conviction in a criminal trial. He has been reinstated after his acquittal by 2 the Supreme Court in Appeal on 20.07.2005. The respondent while posted as Assistant Electrical Engineer, Electric Supply, Sub-Division No. 3, Patna, was alleged to have demanded bribe from a consumer for providing electric supply line. On a complaint made by the consumer, Vigilance P.S. Case No. 10 of 1985 was registered against him under Section 161 of the Indian Penal Code read with Section 5(2) of the Prevention of Corruption Act. Sanction was accorded to the prosecution by the appellant. The respondent was convicted in the trial by judgment and order dated 10.03.1989 and sentenced to one year imprisonment on both charges to run concurrently. Pursuant to the conviction, he was dismissed from the service on 21.03.1990 under Rule 73(viii) of the Service Regulations of the Board. He preferred Criminal Appeal No. 106 of 1989 before this Court against the conviction. The appeal was dismissed on 07.07.1999. The respondent preferred Criminal Appeal No. 1186 of 1999 before the Supreme Court. He also filed C.W.J.C. C. W. J. No.2200 of 1990 before this Court assailing the order of dismissal dated 21.3.1990. The writ petition was dismissed on 19.07.2000. The penultimate paragraph of the order reads “However, the learned counsel for the parties have fairly agreed that in case of success of the petitioner in the appeal pending before the Apex Court and the honorable acquittal in the said appeal, the petitioner will be entitled for reinstatement in service with all consequential 3 benefits for which the Board shall consider in accordance with law”. The appellant Board on 31.07.2000 dismissed the respondent from service in view of the dismissal of Criminal Appeal No. 106 of 1989. On 20.07.2005, Criminal Appeal No. 1186 of 1999 came to be allowed by the Supreme Court. Assailing the impugned order learned counsel for the appellant submitted that no absolute concession was made by the Board in C.W.J.C. No. 2200 of 1990 to pay back wages contrary to law. Strong reliance was placed on 1996(11)SCC 603 (Ranchhodji Chaturji Thakore versus Superintendent Engineer, Gujarat Electricity Board, Himmatnagar(Gujrat) and Another), at paragraph 3:-. “3.The reinstatement of the petitioner into the service has already been ordered by the High Court. The only question is whether he is entitled to back wages. It was his conduct of involving himself in the crime that was taken into account for his not being in service of the respondent. Consequent upon his acquittal, he is entitled to reinstatement for the reason that his service was terminated on the basis of the conviction by operation of proviso to the statutory rules applicable to the situation. The question of back wages would be considered only if the respondents have taken action by way of disciplinary proceedings and the action was found to be unsustainable in law and he was unlawfully prevented from discharging the duties. In that context his conduct becomes relevant. Each case requires to be considered in its own back 4 drop. In this case, since the petitioner had involved himself in a crime, though he was later acquitted, he had disabled himself from rendering the service on account of conviction and incarceration in jail. Under these circumstances the petitioner is not entitled to payment of back wages .......” Reliance was next placed on 2004(1) SCC 121 (Union of India & Ors versus Jaipal Singh) at paragraph 4:- “4............On going through the same, we are in respectful agreement with the view taken in 1996 (11) SCC 603 (supra). If prosecution, which ultimately resulted in acquittal of the person concerned was at the behest or by 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 backwages 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, 5 committed a grave error, in allowing backwages also, without adverting to all such relevant aspects and considerations. Consequently, the order of the High Court insofar as it directed payment of backwages are liable to be and is hereby set aside”. The submission was that they can not be made liable to pay back wages for the period for which they could not avail services of the respondent due to his conviction. It was next urged that the judgment in AIR 2009 SCW 7382(Jaipur Vidyut Viran Nigam Ltd. & Ors versus Nathu Ram) is distinguishable of its own facts on account of the Circular dated 03.09.1975 issued by the Nigam providing for adoption of Regulation 41 of the Employees Service Regulation, 1964 relevant to departmental proceeding, in a case of criminal conviction and consequent acquittal by, fiction. No such circular had been issued by the Appellant Board in context of a criminal prosecution vis-a vis the provisions of Rule 97 of the Bihar Service Code.(hereinafter referred to as the code). It was urged that if the words „exoneration‟ mentioned in Rule 97(2) of the code is interpreted torn out of context by extending it to criminal prosecution also, an anomalous situation shall be created where a government servant who may have remained in custody on account of a criminal case and/or conviction and is ultimately acquitted in appeal would also be entitled to salary for the period of custody. 6 It was last submitted that consequent to the acquittal dated 20.7.2005 in Criminal Appeal No. 1186 of 1999, the respondent has been reinstated in service from that date with all service benefits except for back wages. Learned counsel for the respondent placed strong reliance on the judgment of the Supreme Court in Criminal Appeal No 1186 of 1999 to submit that it was a clean acquittal granted with virtually a finding of a mala fide prosecution. The appellant in C.W.J.C. No. 2200 of 1990 did not make a mere concession but virtually gave an undertaking that in the event of the respondent succeeding in the appeal, not only would the Board reinstate him in service but also pay full back wages as consequential benefits. The regulations of the Board provided for dismissal on conviction. They are silent on the procedure to be followed upon acquittal. The provision of the Bihar Service Code more particularly Rule 97 and Rule 99 will automatically come into play upon acquittal as the appellant has adopted the Code. Rule 97 has to be read harmoniously with Rule 99 of the Bihar Service Code. The latter provides that when a government servant is taken into custody he is deemed to be suspended for the period of custody, not entitled to draw anything beyond subsistence allowance until the termination of the proceedings, released from detention and joining duty. The full amount could be given if he is acquitted of the blame. Therefore if acquittal followed which is nothing but 7 exoneration referred to under Rule 97(2) of the Code and reinstatement was done under Rule 97(1) of the code, he is entitled to full pay and allowances as if he had not been dismissed. This is further clarified by Rule 97(4) of the code which provides that such period shall then be treated as spent on duty for all purposes. Relying on 1972 PLJR 602 (Sheo Prasad versus The State of Bihar and Ors) paragraph No. 6, it was submitted that in a case of clean acquittal in a criminal proceeding as distinct from acquittal by benefit of doubt, he was entitled to the arrears of salary under the Bihar Pension Rules. Placing reliance on AIR 1984 SC 380 (Brahma Chandra Gupta versus Union of India) paragraph No. 6, it was urged that the Supreme Court, as a measure of socio economic justice, after acquittal by the criminal Court, directed for payment of full salary consequent to reinstatement in a prosecution under Section 19(f) of the Indian Arms Act and Section 5 of the Explosive Substance Act. Reliance was next placed on AIR 1991(4) SCC 109(Union of India and Ors versus K.V.Jankiraman and Ors) that where the acquittal in the criminal proceeding is with benefit of doubt or non availability of evidence attributable to the employee etc, only in that event the authority was vested with power to decide whether the arrear of salary consequent to acquittal is to be paid or not. In a 8 case of clean acquittal as the present, on those very principles salary has naturally to be paid. It was lastly urged that it would amount to discrimination under Article 14 of the Constitution of India if a person proceeded with in departmental proceeding is exonerated and entitled to his full salary but one who is prosecuted in a criminal case and acquitted shall still be denied the same because there was no departmental proceeding initiated against him. We find it difficult to affirm the conclusion that the order dated 19.7.2000 in C.W.J.C. No 2200 of 1990 with regard to payment of consequential benefits, attained finality inter partes. A finding of a Court shall bind the parties on an inter se lis. When the lis is determined, the parties to that litigation are bound by it unless challenged before a superior forum. But when there is no lis and merely an understanding to act or not to act in a particular manner, if a particular situation arises or does not arise, it shall not amount to the determination of lis inter-partes. The lis was the termination order and not the issue of back wages. Consequential benefits may or may not include back wages and may be restricted to other service benefits only. The appellant did nothing more than reiterate its duty to act in accordance with law. The case of “Janki Raman” (supra) relied upon by the respondent related to a case of departmental proceeding. It was primarily dealing with issues of procedure 9 to be followed in a departmental proceeding including that of sealed cover consideration for promotion. The lis therein was not in context of a criminal proceeding and acquittal. The reference to the criminal case was only a passing observation on the different kinds of consideration that may arise with regard to a challenge to a departmental proceeding and the punishment passed thereunder. A judgment is an authority for a proposition or question that it actually decides. An observation external to the context made for discussion and inconclusive in itself cannot be stated to be the ratio of the decision. The Supreme Court in AIR 1997 SC 608(State of U.P. and another versus Ved Pal Singh and another) considered a claim for back wages of the respondent who was removed from service on conviction by a criminal Court in an offence under Section 409 IPC but was later acquitted of the charges. It was held in the relevant extract of paragraph 4 as follows. “4. Corruption is the result of deep-seated moral degradation and unsatiated greed for wealth. The office of public service affords an opportunity to the public servant to abuse of the office in that pursuit to accept illegal gratification for the discharge of official duty. Criminal prosecution launched against the public servant many a time may end may be due to technical defects inapathy on the part of the prosecution or approach in consideration of the problem or the witnesses, turn hostile or other diverse reasons but the meet of the matter is that on equitable consideration the Government 10 servant claims re-instatement into service. Equity per settlement may not prevent the Government to take appropriate action under the conduct rules or under Article 311 of the Constitution but many a time they do become fruitless exercise. Resultantly public servant on re-instatement claims consequential benefits including back wages. On many a occasion, public servant avoids the detection of corruption or by skillful management proof of commission of corruption would be wanting. But his conduct gains notoriety in service and among public in that behalf payment of back wages and impetus and a premium on corruption. The society has to pay the price for corrupt officers from public exchequer. Therefore, when the Court directs payment of wages or re-instatement, the Court/Tribunal is required to consider the backdrop of the circumstances and pragmatically apply the principle of to the given set of facts. No abstract principle of universal application could be laid in that behalf. .............. we are of the view that it is not expedient to direct payment of back wages, though he was acquitted by the criminal Court may be on technical grounds or on merits, he is not entitled to back wages. As stated earlier the circumstances of the case and conduct of he appellant do furnish justification in denying him the back wages lest it would be a premium on proclivity for corruption.”(emphasis added) Back wages was held to be not payable whether the acquittal was on technical grounds or on merits. This assumes importance in view of the allegations against the petitioner being under Prevention of Corruption Act. In 1998 ( 2 ) SCC 291 (Hukmi Chand Vs Jhabua Cooperative Central Bank Limited), it has been held at paragraph 7 as follows: “7. It is also contended by the appellant that in his case, 11 not awarding of backwages is unjustified and the order of reinstatement ought to have granted him backwages. The grant of backwages 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.” The complaint was made by a citizen and not the department against the respondent. This resulted in his conviction. It was his own conduct which created a situation attributable to him alone where he was not in a position to discharge his duties consequent to conviction under the service regulations. In 2007(1) SCC 324(Banshi Dhar versus State of Rajasthan and another) the appellant was charged for having made a demand for illegal gratification leading to a case by the Anti Corruption Department. A trap was laid and he was found to have accepted illegal gratification. He was prosecuted under Section 5(1)(d) of the Prevention of Corruption Act read with Section 161 of the Penal Code. Conviction followed. He was dismissed from service. He preferred an appeal against conviction. The appeal was allowed and he stood acquitted. It was urged that the case of 12 Ranchorjee Chatirji (Supra) was wrongly applied by the High Court to deny back wages as that case related to one under Section 302 IPC. The appellant had not remained in custody preventing him from discharging his duties and therefore could not be denied back wages. The Supreme Court denying back wages to him held at paragraph No. 9 to 11 as follows. “9. No hard-and-fast rule can be laid down in regard to grant of back wages. Each case has to be determined on its own facts. A grave charge of criminal misconduct was alleged against him. He was also found guilty of the charges levelled against him by the Special Judge. The High Court while delivering its judgment dated 16-1-2001 in SB Criminal Appeal No. 68 of 1985 inter alia held that the prosecution has not been able to prove that any demand had been made by him. 10. It is now a trite law that judgment of acquittal itself would not have exonerated him of the charges levelled against him. He could have been proceeded against in a departmental proceeding. (See Manager, Reserve Bank of India v. S. Mani and Commr. Of Police v. Narender Singh.) 11. Departmental proceedings, however, could not be held as on the date of passing of the judgment of acquittal, he had already reached his age of superannuation. The learned counsel may be right that the decisions of this Court referred to hereinbefore involved the respective appellants therein on charge of murder under Section 302 of the Indian Penal code, but, as noticed, it has also been laid down that each case has to be considered on its own facts. The High Court refused to exercise its discretionary jurisdiction having regard to the aforementioned decision of this Court in Ranchhodji Chaturji Thakore. We do not see any reason to take a different view. 13 Grant of back wages, it is well settled, is not automatic. Even in cases where principles of natural justice have been held to have not been complied with, while issuing a direction of reinstatement, this Court had directed placing of the delinquent employee under suspension.” The law with regard to grant of back wages has undergone a paradigm shift. The earlier view was that no sooner the order of dismissal or disability is set aside, back wages follow as a matter of course. Considering the evolution of judicial thinking on this aspect, it has been held in 2010(2) SCC 70 (Reetu Marbles versus Prabhakant Shukla) at paragraph 15 and 16 as follows. “15. From the above observations it becomes apparent that payment of full back wages upon an order of termination being declared illegal can not be granted mechanically. It does not automatically follow that reinstatement must be accompanied by payment of full back wages even for the period when the workman remained out of service and contributed little or nothing to the industry.” 16.“Again in Haryana State Electronics Development Corpn. Ltd. V. Mamni this Court reiterated the principle laid down in U.P. State Brassware Corpn. Ltd. Recently this Court again examined the issues with regard to payment of full back wages in P.V.K. Distillery Ltd. V. Mahendra Ram. After examining the relevant case law it has been held as follows:(Mahendra Ram case, SCC pp. 710-11, paras 18-20). 18. Although direction to pay full back wages on a declaration that the order of termination was 14 invalid used to be the usual result but now, with the passage of time, a pragmatic view of the matter is being taken by the court realizing that an industry may not be compelled to pay to the workman for the period during which he apparently contributed little or nothing at all to it and/or for a period that was spent unproductively as a result whereof the employer would be compelled to go back to a situation which prevailed many years ago, namely, when the workman was retrenched. 20. In deciding the question, as to whether the employee should be recompensed with full back wages and other benefits until the date of reinstatement, the tribunals and the courts have to be realistic albeit the ordinary rule of full back wages on reinstatement.(Western India Match Co. Ltd. V. Third Industrial Tribunal)” This was in context of a claim for back wages consequent to the order of termination being set aside by a Labour Court. The essence of the issue shall remain the same with regard to a claim for back wages. That it shall not follow automatically anymore as a matter of course but shall be dependent on various facts. What happens if the respondent consequent to his conviction and being kept away from service has alternative sources of income which he does not disclose? Can he be permitted to achieve a double benefit of salary drawn two sources for that period merely on the ground that he has now been acquitted in the criminal trial. Backwages have to be paid by the government from public funds. It cannot be demanded as matter of right but is dependent on a host of other factors. If the employer 15 engaged another hand during the period of disability by conviction can the employer be saddled with the responsibility to pay both the hands? A counter affidavit has been filed today at the time of final disposal. A bald statement has been made in paragraph No. 7 of the same that he was not in gainful employment through out the period of conviction. This is primarily a question of fact to be prima facie established by the respondent. The appropriate forum for which was before the Hon‟ble Single Judge. In any event, it is a question of fact to be decided on an assertion made by the respondent denied by the appellant after a proper fact finding enquiry. We are not persuaded to hold as urged by the respondent that the onus lay on the appellant to demonstrate that the respondent was not in gainful employment so as to disentitle him to back wages. This Court finds it difficult to hold that on exoneration by the criminal court, the respondent was automatically entitled to back wages under Rule 97 and 99 of the Bihar Service Code. The Code deals with the conduct of departmental proceedings and considers cases of detention when departmental proceedings are held. The Appellants have not issued any circular of the nature noticed in the case of Jaipur Vidyut Nigam(supra) adopting the Code by fiction to a case of criminal conviction and acquittal. The exoneration contemplated under Rule 97 of 16 the Bihar Service Code is in context of a dismissal after a departmental proceeding. The Bihar Service Code does not deal with issues of a criminal prosecution and exoneration thereunder. If it were to be extended to a criminal trial it shall necessarily have to arise out of a criminal case instituted by the department itself and not at the behest of a 3rd party making allegations against a government employee. The appellants have rightly also contended that if the