Delhi High Court

D. B. Madan vs Punjab National Bank on 30 May, 2023

Author:
Jyoti Singh

Bench:
Jyoti Singh

$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 30th May, 2023
+ W.P.(C) 10457/2019
D. B. MADAN ..... Petitioner
Through: Mr. Siddharth Bawa and
Mr. Mohit Sharma, Advocates.

versus
PUNJAB NATIONAL BANK THROUGH ITS CHIEF
MANAGER ..... Respondent
Through: Mr. Rajesh Kumar Gautam,
Mr. Anant Gautam, Mr. Nipun Sharma,
Mr. Sachin Singh, Mr. Vidur Ahluwalia and
Mr. Sumit Sharma, Advocates.

CORAM:
HON'BLE MS. JUSTICE JYOTI SINGH
JUDGEMENT

JYOTI SINGH, J.

1. By this writ petition, Petitioner seeks quashing of the order
dated 21.01.2019, whereby his representation for treating the
suspension period as period in service and payment of balance salary
has been rejected. A writ of certiorari is also sought for quashing the
order dated 11.02.2019, by which Petitioner was informed that the
period of suspension from 17.12.1994 to 13.12.2000 would be treated
as period of service without break and counted towards qualifying
service for calculation of terminal dues but from the date of acquittal
of the Petitioner in the criminal case i.e. 25.05.2018. Writ of
Mandamus is sought directing the Respondent to release to the
Petitioner the difference between full salary and subsistence allowance
with interest for the suspension period and also to treat the length of

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 1 of 26

Signing Date:03.06.2023

12:54:39

service as 31 years instead of 25 years for computation of pension.

2. The factual score that emerges from the writ petition is that
Petitioner joined the Respondent/Punjab National Bank as an Officer
in September, 1976. On 31.08.1992, Central Bureau of Investigation
('CBI') registered an FIR against few officials of the Bank including
the Petitioner for alleged irregularities in some loan accounts of M/s
Pankaj Finance & Leasing Ltd. (PFLL). In September, 1993, New
Bank of India was merged with Respondent/Punjab National Bank and
in October, 1994, sanction was given for prosecution of some
employees of the Bank, including the Petitioner and a charge sheet
was issued thereafter.

3. On 17.12.1994, Petitioner was placed under suspension, which
was revoked on 13.12.2000, without prejudice to the criminal
proceedings/disciplinary action pending/contemplated against him
with a further direction in the order to post him at a non-sensitive post
on the administrative side. One month before his superannuation, a
show-cause notice was served on the Petitioner on 30.05.2007 for
certain irregularities to which a reply was sent by the Petitioner on
12.06.2007. On 28.06.2007, Petitioner was informed that in the wake
of contemplated disciplinary proceedings, his superannuation benefits
shall be withheld. Petitioner superannuated on 30.06.2007.

4. Challenging the show-cause notice and the order dated
28.06.2007, Petitioner filed a writ petition in this Court being W.P.(C)
1290/2008, which was disposed of on 15.09.2008 with a direction to
the Respondent to take a decision on the show-cause notice within
four weeks. Instead of deciding the show-cause notice Respondent
served a charge sheet on the Petitioner on 06.10.2008.

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 2 of 26

Signing Date:03.06.2023

12:54:39

5. On 29.11.2009, Respondent gave a second option for pension to
the Petitioner on deposit of Bank's contribution of Provident Fund and
Petitioner opted for pension and deposited the desired amount.
Consequent thereto, Respondent started paying pension to the
Petitioner w.e.f. 29.11.2009 but without taking into consideration the
period of 6 years during which Petitioner was placed under suspension
and hence the total period computed for pension was taken as 25
years.

6. In the meantime, Petitioner challenged the charge sheet by
filing W.P.(C) 7481/2008 before this Court, which was allowed vide
judgement dated 29.10.2013, quashing the charge sheet as being
without jurisdiction, with a further direction that Petitioner be paid the
retirement benefits along with interest @ 6% p.a. w.e.f 01.07.2007.
Admittedly, this judgement was never assailed by the Respondent and
was implemented by paying the retirement dues along with interest.

7. Significantly, vide judgement dated 25.05.2018, the CBI Court
acquitted the Petitioner of all criminal charges while some of the
co-accused were convicted. Armed with the judgement, Petitioner sent
a representation dated 04.06.2018 to the Respondent requesting for
treating the suspension period from 17.12.1994 to 13.12.2000 as spent
on duty and payment of the difference between the salary and
subsistence allowance already paid, as also to treat the length of
service as 31 years for computation of pension, in accordance with
Regulation 15 of the Punjab National Bank Officer Employees'
(Discipline and Appeal) Regulations, 1977 (hereinafter referred to as
'Regulations 1977').

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 3 of 26

Signing Date:03.06.2023

12:54:39

8. On 21.01.2019, Respondent passed an order rejecting the
request of the Petitioner and Petitioner made further representations
citing certain judgements in his favour. An order was passed by the
Respondent on 11.02.2019, partly accepting the request of the
Petitioner and agreeing to treat the suspension period as service
without break for calculation of pension albeit from the date of
acquittal and not from 29.11.2009, the date from which the Petitioner
has started getting his pension, on the ground that Petitioner was not
honourably acquitted in the criminal case and the acquittal was by
giving benefit of doubt. Further representations of the Petitioner failed
to evoke any positive response, constraining him to file the present
writ petition.

9. Learned counsel for the Petitioner contended that Regulation
15(1) of the Regulations 1977 provides that where the employee is
fully exonerated or the suspension is unjustifiable, he shall be granted
full pay for the intervening period. Regulation 15(3)(a) further
provides that where Regulation 15(1) applies, period of absence from
duty shall, for all purposes, be treated as period spent on duty.
The ground for denying the full salary for the suspension period is that
the Petitioner has not been fully exonerated and was acquitted by
giving benefit of doubt and 'no work no pay'. The stand of the
Respondent is completely misconceived. Petitioner stands fully
exonerated since the charge sheet in the disciplinary proceedings was
quashed and the CBI Court has also acquitted him while convicting
the others, where criminality and culpability was found by the Court,
after detailed examination of the evidence, both oral and documentary.
43 witnesses were examined by the prosecution and documentary

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 4 of 26

Signing Date:03.06.2023

12:54:39

evidence runs into hundreds of exhibits. The acquittal is not based on
any flaw in the prosecution case or on ground of non-examination of
witnesses and/or any witness turning hostile. The Supreme Court in

Union of India and Others v. Methu Meda
, (
2022) 1 SCC 1 and
Commissioner of Police, New Delhi and Another v. Mehar Singh
,
(2013) 7 SCC 685, has held that the expressions 'honourable
acquittal', 'acquitted of blame' and 'clean acquittal' have been coined
by judicial pronouncements and in cases where accused is acquitted
due to technicalities on account of faulty prosecution, compromise,
etc., it can be said that accused is not honourably acquitted, however,
acquittal on account of benefit of doubt is a complete acquittal on
merits as observed in Mohan Lal, Constable No. 744/L, 283/Sd,
Delhi Police, Delhi v. Union of India & Others, 1981 SCC OnLine
Del 213.

10. Respondent has gravely erred in not treating the period of
suspension towards calculation of the computation of pensionary
benefits. There is no law which permits the Respondent to reckon the
period from the date of acquittal by the Criminal Court instead of from
the date of retirement of an employee. No provision of law or
judgement has been cited by the Respondent for linking the
computation of the period to the date of acquittal by the Criminal
Court.
In the order dated 21.01.2019, reliance is placed by the
Respondent on the judgement of the Supreme Court in
Union of India
and Others v. Jaipal Singh
, (2004) 1 SCC 121, however, the said
judgement is wholly inapplicable to the present case. First and
foremost, it does not deal with the provision such as Regulation 15 of
Regulations 1977. Secondly, it is not in the hands of an accused to

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 5 of 26

Signing Date:03.06.2023

12:54:39

control the length of time for which a criminal trial proceeds and
therefore it is extremely dangerous to link the date of the judgement
for the purpose of commencement of the period which is to be counted
for pensionary benefits. Thirdly and importantly, in the said case the
accused was convicted by the Trial Court and then suspended and
finally reinstated on acquittal by the Sessions Court. In this
background, the Supreme Court held that if an employee is convicted
by the Trial Court and subsequently acquitted in an appeal, department
cannot be faulted for having kept him out of service, since the law
obliges a person convicted of an offence to be kept out and not
retained in service. In this background, the Supreme Court held that
the department cannot be made liable to pay for the period for which it
did not avail the services of the employee and the High Court erred in
allowing back wages. In the present case, Petitioner was acquitted by
the Trial Court as contrasted to the facts in the aforementioned case.

11. It was further submitted that Petitioner is now 75 years of age
and suffering from various ailments. He has already suffered for
several years on account of a false and illegal charge sheet issued by
the department as well as by the CBI, both of which stand quashed by
the respective Courts, vindicating the stand of the Petitioner that he
was innocent. There is thus no impediment in the way of the Petitioner
in getting the reliefs sought for in the present petition.

12. Per contra, learned counsel for the Respondent submitted that
most of the terminal dues of the Petitioner have been released, details
of which have been given in the short affidavit. After the decision on
11.02.2019 to treat the period of suspension as period of service
without any break from the date of acquittal, further amounts towards

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 6 of 26

Signing Date:03.06.2023

12:54:39

gratuity and commutation of pension/monthly pension have also been
released. However, Petitioner is not entitled to terminal benefits from
the date of superannuation for the reason that the revocation of
suspension was made subject to the outcome of criminal proceedings,
which have ended in acquittal but by giving benefit of doubt. The
acquittal of the Petitioner is not honourable and cannot be termed as a
case of "full exoneration". To support the contention, learned counsel
had taken the Court through the relevant passages of the judgement of
the Criminal Court delivered on 25.05.2018.

13. It was further urged that Regulation 15(1) provides that where
the Competent Authority is of the view that the employee has been
fully exonerated or the suspension was unjustifiable, the employee
will be entitled to full pay together with allowances. Since in the
present case, it cannot be said that the Petitioner is fully exonerated,
he cannot be held entitled to full benefits and it is on this count that
the difference in the full salary and subsistence allowance has been
denied to the Petitioner.
In support, reliance is placed on the
judgement of the Supreme Court in
Jaipal Singh
(supra).

14. Learned counsel also placed reliance on the judgement of the
Supreme Court in
Baldev Singh v. Union of India and Others
, (2005)
8 SCC 747, to contend that once an employee is not in actual service
for the period he is in custody, merely because there is an acquittal
does not automatically entitle him to salary for the period concerned
applying the principle of "no work no pay".

For the same proposition,
reliance was placed on the judgement in
Banshi Dhar v. State of
Rajasthan and Another
, (2007) 1 SCC 324 and it was argued that it
was only from the date the CBI Court acquitted the Petitioner that his

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 7 of 26

Signing Date:03.06.2023

12:54:39

service can be counted for the purpose of pension and gratuity.

For the
proposition that acquittal on ground of benefit of doubt cannot be
considered as a case of full exoneration i.e. honourable acquittal,
reliance was placed on the judgements in
C.R. Radhakrishnan v.
State of Kerala and Others
, (
2017) 13 SCC 365, Management of
Reserve Bank of India, New Delhi v. Bhopal Singh Panchal
, (1994)
SCC 541 and Methu Meda
(supra).

15. I have heard the learned counsels for the parties and examined
their contentions.

16. Two issues arise for consideration before this Court originating
from the grievances ventilated by the Petitioner: (a) whether the
Petitioner is entitled to full salary for the suspension period between
17.12.1994 to 13.12.2000; and (b) correctness of the action of the
Respondent to treat the length of service as 25 years instead of 31
years in failing to reckon the suspension period 17.12.1994 to
13.12.2000, for purpose of computation of pension for the period
29.11.2009 to 25.05.2018.

17. Narrative of facts shows that Petitioner was placed under
suspension on 17.12.1994 pursuant to a criminal case in which charge
sheet was filed in October, 1994. He remained under suspension till
the suspension order was revoked and he was reinstated on
14.12.2000, pending final adjudication in the criminal case and subject
to outcome of contemplated disciplinary action. Respondent initiated
departmental proceedings against the Petitioner by issuing a charge
sheet on 06.10.2008, which was quashed by this Court by a judgment
dated 29.10.2013 in W.P.(C) 7481/2008. Subsequently, Petitioner was
acquitted in the criminal case on 25.05.2018. Pertinently, Respondent

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 8 of 26

Signing Date:03.06.2023

12:54:39

did not challenge the judgment dated 29.10.2013 quashing the charge
sheet in the departmental proceedings and the State did not challenge
the judgment in the criminal case, acquitting the Petitioner and thus
both judgments have attained finality.

18. Rejection of the claims of the Petitioner by the Respondent is
primarily predicated on its understanding that Petitioner was not
'honourably' acquitted by the Trial Court and therefore does not fit in
the four corners of Regulation 15(1) of Regulations 1977, under which
an employee is entitled to full salary and allowances only upon 'full
exoneration' and/or where the 'suspension is found to be
unjustifiable'. It is on this score that the Petitioner has been denied the
benefit of counting the suspension period for the purpose of
computation of pension resulting in loss of six years and
allowances/increments etc. minus the payments towards subsistence
allowance. Counsel for the Petitioner laboured hard to establish that
Petitioner's acquittal was a clean acquittal and not by giving benefit of
doubt as the CBI Court had conducted a full-fledged trial examining
43 witnesses and hundreds of documents as exhibits and only on
detailed examination of evidence had acquitted the Petitioner, while
convicting 4 co-accused. In order to so demonstrate, learned counsel
had taken the Court through the judgment of the Criminal Court,
which is appended to the writ petition.

19. To test the contentions of the Respondent, Regulation 15 of
Regulations 1977 would require an examination and the same is
extracted hereunder, for ready reference:-

"15. Pay, Allowance and Treatment of Service on termination of
suspension:

Signature Not Verified (1) Where the competent authority holds that the officer

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 9 of 26

Signing Date:03.06.2023

12:54:39

employee has been fully exonerated or that the suspension
was unjustifiable, the officer employee concerned shall be
granted the full pay to which he would have been entitled,
had he not been suspended, together with any allowance of
which he was in receipt immediately prior to his suspension,
or may have been sanctioned subsequently and made
applicable to all officer employees.

(2) In all cases other than those referred to in sub-regulation (1),
the officer employee shall be granted such proportion of pay
and allowances as the competent authority may direct:

Provided that the payment of allowances under this sub-
regulation shall be subject to all other conditions to which
such allowances are admissible;

Provided further that the pay and allowances granted under
this sub-regulation shall not be less than the subsistence and
other allowances admissible under regulation 14.
(3) (a) In a case falling under sub-regulation (1), the
period of absence from duty shall, for all purposes, be
treated as a period spent on duty;

(b) In a case falling under sub-regulation (2), the period
of absence from duty shall not be treated as a period spent
on duty, unless the competent authority specifically directs,
for reasons to be recorded in writing, that it shall be so
treated for any specific purpose."

20. Plain reading of Regulation 15 (1) of Regulations 1977 shows
that an employee concerned is entitled to full pay and allowances, if
he is fully exonerated or his suspension is found to be unjustifiable. It
is not in dispute that Respondent initially made payments to the
Petitioner on account of Provident Fund (Petitioner's contribution),
Gratuity, Leave Encashment, commutation of Pension and monthly
pension is also being paid. Thereafter, a decision was taken that the
period of suspension from 17.12.1994 to 13.12.2000 will be treated as
period of service without any break for the purpose of Gratuity and
Pension from the date of acquittal in criminal proceedings i.e.
25.05.2018 and pursuant thereto additional terminal benefits towards
Gratuity, commutation of Pension and monthly Pension were also

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 10 of 26

Signing Date:03.06.2023

12:54:39

paid. Therefore, the dispute that remains to be resolved between the
parties is with respect to the salary for the suspension period minus the
subsistence allowance paid and counting of the period for computation
of Pension, which is required to be decided in light of the defence of
the Respondent that Petitioner's acquittal is not a clean acquittal and
doctrine of 'no work no pay'.

21. Impugned order shows that Respondent has placed reliance on
the judgment of the Supreme Court in
Jaipal Singh
(supra), where the
Supreme Court held that where an employee gets involved in a
criminal case and after initial conviction gets acquitted on an appeal,
Department cannot be faulted with for having kept him out of service
and cannot be made liable to pay for the period for which it could not
avail the services of the employee. Much was argued by the
Respondent that the acquittal of the Petitioner is not a clean or
honourable acquittal and therefore no interference is warranted in the
exercise of discretion by the Respondent in treating the period of
suspension as 'not on duty' and denying the balance wages for that
period. In the short affidavit filed by the Respondent, a stand is taken
that it is only upon 'full exoneration' or in a case where period of
suspension is found to be unjustifiable under Regulation 15(1) read
with 15(3)(b) of Regulations 1977 that period of absence from duty
can be treated as period spent on duty and that in the present case,
reading of the judgement of the criminal case would show that
Petitioner's acquittal was not honourable so as to be termed as a case
of 'full exoneration'.

22. Before proceeding further to examine the meaning and
connotation of the expression 'full exoneration', which is really the

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 11 of 26

Signing Date:03.06.2023

12:54:39

bone of contention between the parties, Regulation 15(1) needs to be
seen. A plain and a close reading of the said Regulation shows that an
employee will be entitled to full pay and allowances on termination of
suspension if he is fully exonerated 'or' his suspension was
unjustifiable. Use of the word 'or' shows that the conditions are in the
alternative, which means that even where the suspension is
unjustifiable but an employee is fully exonerated, he would be entitled
to wages for the suspension period. Therefore, it needs to be examined
whether the Petitioner's suspension was unjustifiable and to my mind,
the answer to this question cannot be in favour of the Petitioner. As a
matter of fact, Petitioner was placed under suspension on 17.12.1994
in view of a charge-sheet filed by the CBI for penal offences as well
as for alleged acts of corruption under the
Prevention of Corruption
Act, 1988
. The suspension was revoked on 16.12.2000, without
prejudice to the criminal/disciplinary proceedings
pending/contemplated with further stipulation that payment of
salary/wages for suspension period shall be decided upon final
outcome of the pending criminal proceedings and contemplated
disciplinary action. In view of the seriousness of the charge-sheet filed
by the CBI, it cannot be held that the suspension was unjustified.
However, the provision is not restricted to 'unjustified suspension'
since
Regulation 15(1)
entitles payment of pay and allowances where
there is 'full exoneration' and in light of this stipulation, the moot
question that requires consideration is whether Petitioner can be stated
to be 'fully exonerated'. The expressions 'honourable acquittal', 'fully
acquitted' and 'clean acquittal', were held to be unknown to
Code of
Criminal Procedure
or
Indian Penal Code
and were developed by

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 12 of 26

Signing Date:03.06.2023

12:54:39

judicial pronouncements.
In
Robert Stuart Wauchope v. Emperor
,
1933 SCC OnLine Cal 369, Lord Williams, J. observed as under:-

"10. ......

"The expression "honourably acquitted" is one which is
unknown to courts of justice. Apparently it is a form of order
used in courts martial and other extra-judicial tribunals. We
said in our judgment that we accepted the explanation given by
the appellant, believed it to be true and considered that it ought
to have been accepted by the government authorities and by the
Magistrate. Further we decided that the appellant had not
misappropriated the monies referred to in the charge. It is thus
clear that the effect of our judgment was that the appellant was
acquitted as fully and completely as it was possible for him to be
acquitted. Presumably, this is equivalent to what the government
authorities term "honourably acquitted"."

23.
In
Methu Meda
(supra), the Supreme Court once again
examined the expression 'honourable acquittal' and held as under:-

"12. In view of the above, if the acquittal is directed by the court on
consideration of facts and material evidence on record with the
finding of false implication or the finding that the guilt had not been
proved, accepting the explanation of accused as just, it be treated as
honourable acquittal. In other words, if prosecution could not prove
the guilt for other reasons and not "honourably" acquitted by the
court, it be treated other than "honourable", and proceedings may
follow.

13. The expression "honourable acquittal" has been considered in
S. Samuthiram [State v. S. Samuthiram, (2013) 1 SCC 598 : (2013) 1
SCC (Cri) 566 : (2013) 1 SCC (L&S) 229] after considering the
judgments in RBI v. Bhopal Singh Panchal [RBI v. Bhopal Singh
Panchal, (1994) 1 SCC 541 : 1994
SCC (L&S) 594] and R.P. Kapur
[R.P. Kapur v. Union of India
, AIR 1964 SC 787] , Raghava
Rajgopalachari [State of Assam v. Raghava Rajgopalachari, 1967
SCC OnLine SC 1 : (1972) 7 SLR 44] ; this Court observed that the
standard of proof required for holding a person guilty by a criminal
court and enquiry conducted by way of disciplinary proceeding is
entirely different. In a criminal case, the onus of establishing guilt of
the accused is on the prosecution, until proved beyond reasonable
doubt. In case, the prosecution failed to take steps to examine
crucial witnesses or the witnesses turned hostile, such acquittal
would fall within the purview of giving benefit of doubt and the
accused cannot be treated as honourably acquitted by the criminal
court. While, in a case of departmental proceedings, the guilt may be

Signature Not Verified proved on the basis of preponderance of probabilities, it is thus

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 13 of 26

Signing Date:03.06.2023

12:54:39

observed that acquittal giving benefit of doubt would not
automatically lead to reinstatement of candidate unless the rules
provide so."

24.
In
Deputy Inspector General of Police and Another v. S.
Samuthiram
, (2013) 1 SCC 598, the Supreme Court held that if a
person is acquitted or discharged, it cannot always be inferred that he
was falsely implicated and unless it is an honourable acquittal,
benefits cannot be claimed. In
the said judgment
, the Supreme Court
once again examined the meaning and connotation of the expression
'honourable acquittal' and held as follows:-

"10. Shri C. Paramasivam, learned counsel appearing for the
appellant, submitted that the High Court was not justified in
interfering with disciplinary proceedings and setting aside the order
of dismissal of the respondent. The learned counsel submitted that
the High Court overlooked the fact that the standard of proof in a
domestic enquiry and criminal enquiry is different. The mere
acquittal by the criminal court does not entitle the delinquent for
exoneration in the disciplinary proceedings. The learned counsel
also submitted that the case in hand is not where punishment of
dismissal was imposed on the basis of conviction in a criminal trial
and only in such situation, acquittal by a court in a criminal trial
would have some relevance. Further, it was also pointed out that, in
the instant case, the respondent was not honourably acquitted by the
criminal court, but was acquitted since the complainant turned
hostile."

25. From the conspectus of the aforesaid judgments, the principles
that cumulatively emerge are that where the acquittal by a criminal
court is on consideration of facts and evidence on record, both oral
and documentary, with the finding that the guilt has not been proved,
accepting the stand of the accused as just it will be treated as
honourable acquittal. As held in
Methu Meda
(supra), if the
prosecution is unable to prove the guilt for other reasons then it is not
an honourable acquittal and for coming to this conclusion, the
Supreme Court took strength from the observations of an earlier

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 14 of 26

Signing Date:03.06.2023

12:54:39

judgment in S. Samuthiram (supra), wherein the Supreme Court held
that if the prosecution fails to take steps to examine crucial witnesses
or where the witnesses turn hostile, such acquittal would fall within
the purview of giving benefit of doubt and the accused cannot be
treated as honourably acquitted.

26. I have perused the judgement of the criminal court in light of
the above principles. It is seen from the judgement that CBI had
charge-sheeted several people including the accused for offences
punishable under Sections 420/467/468/471 read with 120-B
IPC
and

Section 13(i)(d)
read with
Section 13(2)
of the Prevention of
Corruption Act, 1988. In a nutshell, the charge was that during 1989,
M/s PFLL represented by its Director conspired with officers of the
Respondent Bank and obtained loan of Rs.26,67,694/- on the basis of
forged documents and advance to the tune of Rs.16,30,900/- was
given against five vehicles to M/s Geetanjali Motors Ltd. on the basis
of forged bills and an amount of Rs.10,36,794/- was given for
purchase of three vehicles on duplicate bills of Rasna Automobile (P)
Ltd. and neither of the two firms purchased or sold the vehicles. There
were 8 accused in the matter and the prosecution examined 43
witnesses along with a plethora of documentary evidence. Defence
also examined several witnesses and produced documentary evidence.
By a detailed judgement dated 25.05.2018, the Trial Court held that
prosecution had succeeded in proving its case against 4 accused
beyond reasonable doubt and convicted them whereas the Petitioner
along with Kuldeep Singh Malik were acquitted of all charges by
giving benefit of doubt. From paragraph 155 onwards, the Trial Court
has dealt with the case of the Petitioner who was working as Manager

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 15 of 26

Signing Date:03.06.2023

12:54:39

(loans) in the Bank and after examining the entire evidence and the
arguments of the prosecution and the defence, rendered a finding that
loan amounts with respect to five vehicles were already processed and
released prior to the joining of the Petitioner as admitted by the
prosecution and proved by D2W1 through mark 'D2W1/3' that
Petitioner took charge of the Department of Loans on 22.07.1989 prior
to which drawing power with respect to five vehicles was already
entered into and released and therefore he could have no role or
authority for approval of the agreements relating to the first five
vehicles. Trial Court concluded that the act of the Petitioner in signing
the agreements at subsequent stage can be termed as an irregularity on
his part but criminality cannot be attributed to him on this account and
the only role that comes up in relation to the transaction of five
vehicles is that Petitioner signed the agreements considering it a mere
formality and therefore he cannot be held accountable.

27. Insofar as the transaction with respect to the second tranche of
three vehicles is concerned, the Trial Court noted that during October,
1989, documents were submitted in the Bank relating to finance of
three vehicles, loans No.169, 170 and 171, which were not purchased
by M/s. PFLL and it is also true that Petitioner had signed and
approved the three agreements and drawing powers were accordingly
enhanced. Having so observed, the Trial Court further notes that the
relevant documents i.e. invoices, receipts and insurance cover notes
annexed to the agreements were not forged as they were procured
from authorized places and persons, but later the payments were
stopped towards the seller and insurer, resulting in cancellation of
invoices and the documents were misused by Sushil Kumar Gupta,

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 16 of 26

Signing Date:03.06.2023

12:54:39

accused No.4, to cheat the Bank. In this backdrop, Trial Court held
that it is quite possible that Petitioner was not personally knowing
about the factum of stop payment of cheques by M/s. PFLL towards
purchase money of vehicles and insurance premium and therefore
element of doubt arises and it cannot be concluded that Petitioner has
acted dishonestly in favour of M/s. PFLL, particularly, when it is
evident that Senior Officer V.K. Bhutiani, accused No.1 was
instrumental in handling the accounts of PFLL. It was further held that
the Directors of M/s. PFLL have successfully defrauded the Bank with
collusion of Senior Manager and the role of the Petitioner appears to
be doubtful in the entire transaction and he is therefore entitled to
benefit of doubt.

28. On a close examination of the findings of the Trial Court, I am
of the view that there is merit in the contention of the Petitioner that
the prosecution despite producing 43 witnesses and hundreds of
documents, was unable to establish the guilt of the Petitioner. The
Trial Court has, upon examination of evidence, both oral and
documentary, held that Petitioner cannot be held accountable for
signing the agreements with respect to five vehicles, pertaining to
which all necessary formalities stood completed even before he joined
the Bank and therefore had no role in the transactions. With respect to
the second transaction of three vehicles, it is clearly brought forth in
the judgment that while the Petitioner had signed the agreements, the
documents pertaining thereto such as the invoices, etc. were neither
forged nor procured from unauthorized places/persons and it was later
that accused No.4 had misused the documents to cheat the Bank and
the Petitioner perhaps had no knowledge either of the stop payment of

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 17 of 26

Signing Date:03.06.2023

12:54:39

cheques by M/s. PFLL towards purchase money or insurance premium
of the vehicles and it cannot be concluded that he had acted
dishonestly. Trial Court found culpability with respect to 6 accused
and convicted them while acquitting the Petitioner and to my mind,
the mere use of the words 'benefit of doubt' cannot be read out of
context and superfluously and will have to be given a meaning on a
holistic reading of the judgement, where the Trial Court did not find
that any culpability could be attached to the Petitioner.

29. Furthermore, it is not a case where the prosecution has failed to
take steps to examine crucial witnesses or the witnesses turned hostile,
etc., which are the category of cases in which the Supreme Court has
held that an acquittal will not be termed as an honourable acquittal.

30. There is yet another aspect of the matter. It is true that even
after an acquittal in a criminal case, an employee can be subjected to
departmental proceedings and if found guilty of the misconduct,
action can be taken in accordance with the rules and regulations
governing disciplinary proceedings. Once a departmental proceeding
is initiated, even on the same allegations for which there is acquittal
and results in a finding of guilt and imposition of penalty, it is
certainly open to an employer to pass an order directing that the
employee will not be entitled to back wages for the suspension period
and treat the suspension period as not spent on duty and/or any other
consequence permissible in law. However, in the present case
Respondent had already taken recourse to this path way back when
charge sheet was issued on 06.10.2008. Petitioner had superannuated
from the Respondent Bank on 30.06.2007, whereafter a charge sheet
was issued post his retirement, preceded by a show-cause notice on

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 18 of 26

Signing Date:03.06.2023

12:54:39

30.05.2007. The charge sheet pertained to the same set of allegations
as in the criminal case. Charge sheet was challenged by the Petitioner
by filing a writ petition in this Court being W.P.(C) No.7481/2008 and
relying on
Regulation 20(3)(ii)
of 1979 Regulations of the Bank and
the judgement of the Supreme Court in
UCO Bank and Another v.
Rajinder Lal Capoor
, (2008) 5 SCC 257, this Court quashed the
charge sheet vide judgment dated 29.10.2013. Relevant part of the
judgment is as under:-

"7. The relevant paras of the judgment of Supreme Court in the
case of
UCO Bank
(supra) are paras 13 to 23 and 29 to 31 and the
same read as under:-

"13. Sub-regulation (1) of
Regulation 20
of the 1979
Regulations, thus, deals with termination of service where the
performance of an officer is unsatisfactory or inadequate or
where there is a bona fide suspicion about his integrity or where
his retention in the Bank's service is prejudicial to interests of
the disciplinary procedure. Other sub-regulations of Regulation
20 provide for the mode and manner in which such termination
may be effected as also his entitlement to prefer an appeal
thereagainst and other benefits to which he would be otherwise
entitled to.

14. Sub-regulation (2) of
Regulation 20
of the 1979 Regulations
places an embargo on an official to leave or discontinue his
service of the Bank without giving a notice in writing. It
prescribes a period of notice.

15. Sub-regulation (3) of
Regulation 20
, however, places an
embargo on an officer to leave or discontinue or resign from
service without the prior approval in writing of the competent
authority and a notice or resignation given by such an officer
before or during the disciplinary proceedings shall not take
effect unless it is accepted by the competent authority. Clause

(ii) of sub-regulation (3) of
Regulation 20
must be considered
from that aspect of the matter. It raises a legal fiction. Such
legal fiction has been raised only for the purpose of "this
Regulation" and for no other, which would mean
Regulation
20(1)
. The final orders which are required to be passed by the
competent authority although indisputably would be in relation
to the disciplinary proceedings but evidently it is for the purpose
of accepting resignation or leaving or discontinuing of the
service by the employee concerned or grant of approval thereof.

Signature Not Verified Clause (ii) of sub-regulation (3) of Regulation 20 in effect and

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 19 of 26

Signing Date:03.06.2023

12:54:39

substance acts as a proviso to Clause (i) thereof.

16. Clause (iii) of sub-regulation (3) of
Regulation 20
is an
independent provision. It provides for continuation of the
disciplinary proceedings. Such disciplinary proceedings
indisputably for the purpose of applicability of sub-regulation
(3) must have been initiated in terms of the 1976 Regulations.

17. It is worth noticing the distinction between terminologies
"proceeding pending" or "proceeding initiated". Clause (ii) of
sub-regulation (3) of
Regulation 20
defines what would be
pending viz. for the purpose of attracting Clause (i) thereof.

18. A disciplinary proceeding is initiated in terms of the 1976
Regulations, which are applicable only in a case where a
proceeding is initiated for the purpose of taking disciplinary
action against a delinquent officer for the purpose of imposing a
punishment on him. Disciplinary proceedings, thus, are initiated
only in terms of the 1976 Regulations and not in terms of the
1979 Regulations.

19. It is worth noticing that the 1979 Regulations would be
attracted when no disciplinary proceeding is possible to be
initiated. The 1976 Regulations, however, on the other hand,
would be attracted when a disciplinary proceeding is initiated.
Both operate in separate fields. We do not see any nexus
between Regulations 20(1) and 20(2) of the 1979 Regulations
and the 1976 Regulations.

20. The 1976 Regulations provide for the mode and manner in
which a disciplinary proceeding is initiated. It expressly
provides for service of charge-sheet. Service of charge-sheet is a
necessary ingredient for initiation of disciplinary proceedings. A
preliminary enquiry is not contemplated under the 1976
Regulations. If such an enquiry is held, the same is only for the
purpose of arriving at a satisfaction on the part of the
disciplinary authority to initiate a proceeding and not for any
other purpose.

21. If it is found that a disciplinary proceeding can be and
should be initiated, recourse to the 1976 Regulations would
have to be taken, if not, the 1979 Regulations may be resorted to
if the conditions precedent therefor are satisfied. It is only with
a view to put an embargo on the officer to leave his job, Clause

(ii) of sub-regulation (3) of
Regulation 20
of the 1979
Regulations has been made. It's scope is limited.

22. We have noticed hereinbefore that each regulations operate
in different fields. When a proceeding is initiated for the purpose
of taking any disciplinary action on the ground of any
misconduct which might have been committed by the officer

Signature Not Verified concerned indisputably the procedures laid down in the 1976

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 20 of 26

Signing Date:03.06.2023

12:54:39

Regulations are required to be resorted to.

23. The 1979 Regulations would be attracted only for the
purpose of termination of service. Had the intention of the
regulation-making authority been that the legal fiction created
under Clause (ii) of sub-regulation (3) of
Regulation 20
would
cover both Clauses (i) and (iii), the same should have been
placed only after Clause (iii). In such an event, Clause (ii) of
sub-regulation (3) of
Regulation 20
should have been differently
worded. Some non obstante clause would have been provided
for making an exception to the applicability of the 1976
Regulations when a legal fiction is created, although it is
required to be taken to the logical conclusion (see East End
Dwellings Co. Ltd. v. Finsbury Borough Council [1952 AC 109
: (1951) 2 All ER 587 (HL)] ), but the same would not mean that
the effect thereof would be extended so as to transgress the
scope and purport for which it is created.

xxxx xxxx xxxx xxxx

29. In terms of the 1976 Regulations drawing up of a charge-
sheet by the disciplinary authority is the first step for initiation
of a disciplinary proceeding. Unless and until, therefore, a
charge-sheet is drawn up, a disciplinary proceeding for the
purpose of the 1976 Regulations cannot be initiated. Drawing
up of a charge-sheet, therefore, is the condition precedent for
initiation of a disciplinary proceeding. We have noticed in para
15 of our judgment that ordinarily no disciplinary proceedings
can be continued in absence of any rule after an employee
reaches his age of superannuation. A rule which would enable
the disciplinary authority to continue a disciplinary proceeding
despite the officers reaching the age of superannuation must be
a statutory rule. A fortiori it must be a rule applicable to
disciplinary proceedings.

30. There cannot be any doubt whatsoever that the employer
may take resort to a preliminary inquiry, but it will bear
repetition to state that the same has a limited role to play. But,
in absence of the statutory rules operating in the field, resorting
to a preliminary enquiry would not by itself be enough to hold
that a departmental proceeding has been initiated.

31. Initiation of a disciplinary proceeding may lead to an evil or
civil consequence. Thus, in absence of clear words, the court
must lean in favour of an interpretation which has been applied
by this Court in the main judgment." (underlining added).

8. Since the admitted facts in this case are that chargesheet was
issued to the petitioner only on 06.10.2008 i.e well after
superannuation of the petitioner on 30.06.2007, therefore, in terms
of the ratio in the case of
UCO Bank
(supra), disciplinary

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 21 of 26

Signing Date:03.06.2023

12:54:39

proceedings are initiated only on issuance of a chargesheet and not
on issuing of show cause notice, and therefore, disciplinary
proceedings could not be validly initiated in terms of the chargesheet
issued after the superannuation of the petitioner. The impugned
chargesheet is therefore liable to be and is accordingly quashed for
this reason itself.

9. I may note that the basic charges against the petitioner with
respect to the chargesheet issued on 06.10.2008 were with respect to
factual allegations of the year 1989 i.e roughly 19 years earlier and
when petitioner was the employee of his then employer M/s New
Bank of India and which bank subsequently merged with the present
respondent no. 1-Punjab National Bank. Since the charge sheet itself
is quashed, and therefore there are no valid disciplinary proceedings
against the petitioner, the respondent no. 1-bank also cannot invoke

Regulation 20(3)(iii)
to retain the retirement benefits of the
petitioner.

10. In view of the above, writ petition is allowed by quashing of
the charge sheet dated 06.10.2008 issued against the petitioner and
directing that petitioner be paid his retiremental benefits alongwith
interest @ 6% per annum simple on the retiremental dues payable
with effect from 01.07.2007 and till the amount is paid to the
petitioner. Parties are liable to bear their own costs."

31. From a reading of the judgement, it is explicitly clear that the
charge sheet was quashed by the Court on the ground that the
Regulations did not permit the issuance of the same and since it was
without jurisdiction, no liberty was granted to the Respondent to
reinitiate the disciplinary proceedings by issuing a fresh charge sheet.
It is an admitted position that the judgement was not challenged by the
Respondent perhaps because it was realized that the issuance of the
charge sheet was illegal. The net result is that neither in the
departmental proceedings nor before the criminal court, Respondent
has succeeded in proving the allegations/culpability against the
Petitioner and he will be covered under the expression 'fully
exonerated' within the meaning of
Regulation 15(1)
and therefore the
impugned action of denying him the back wages for the suspension
period minus the subsistence allowance is illegal and unjustified.

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 22 of 26

Signing Date:03.06.2023

12:54:39

32. Insofar as the claim of the Petitioner for computing the period
of suspension from 17.12.1994 to 13.12.2000 for the purpose of
pension is concerned, the same is also valid. Respondent has already
treated the said period towards qualifying service for pension but has
denied the same for computation of pension as a result of which the
length of service for calculation has been taken as 25 years instead of
31 years. Order dated 11.02.2019 counting the period of suspension
towards qualifying service for calculation of terminal dues is extracted
hereunder for ready reference:-

"...

Reg: Your, representation dated 04.06.2018 with regards to
treatment of suspension period (from 17.12.1994 to 13.12.2000) as
period in service and payment of back wages.

In continuation to our previous letter dated 21.01.2019 we inform
you that the competent authority has agreed to treat your period of
suspension from 17.12.1994 to 13.12.2000 as period of service
without any break. Accordingly, the period of suspension shall be
counted as qualifying service for calculation of terminal dues i.e.,
Gratuity and Pension from the date of your acquittal by Hon'ble
special Judge CBI
(PC Act
)-06 i.e., 25.05.2018."

33.
In
Dinesh Kumar Kain v. Assistant General Manager, Corpn
Bank & Anr.
, 2006 SCC OnLine Del 448, this Court while dealing
with a similar issue pertaining to a pari materia regulation, held the
Petitioner entitled to counting the suspension period for the purpose of
seniority, increments, etc. In the said case, Petitioner sought quashing
of an order by which his claim for treating the period of suspension on
duty with consequential benefits of back wages etc. was rejected.
Petitioner was arrested and remanded to judicial custody for alleged
offences under
Prevention of Corruption Act
. He was placed under
suspension on arrest awaiting the outcome of the trial but no
departmental proceedings were initiated. Petitioner was reinstated into

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 23 of 26

Signing Date:03.06.2023

12:54:39

service and subsequently he was acquitted of the charges. Invoking

Regulation 15 (1)
of the Corporation Bank Officer Employees'
(Discipline & Appeal) Regulations, 1982, Respondent decided not to
treat the period of suspension on duty and pay and allowances for the
said period were also declined. Period of suspension was, however,
reckoned for limited purpose of continuity of service for Gratuity and
Pension and no other purpose. It needs a mention that Regulations
15(1) and (2) in the said case are pari materia to the Regulations in
this case. The stand of the Respondent was that on a combined reading
of Regulations 15(1) and (2), no employee can claim full back wages
for the suspension occasioned by the criminal trial where the acquittal
was after giving benefit of doubt.

34. The Court after examining the Regulations and the facts of the
case including the order passed by the Respondent, whereby the
period of suspension was treated to reckon for limited purpose of
continuity of service for Gratuity and Pension and no other purpose,
held that depriving the Petitioner of continuity of service for the
purpose of consequential benefits of seniority, increments and other
normal benefits would be oppressive and arbitrary.

35. This Court cannot disagree with the Respondent on the
proposition of law that grant of back wages and/or treatment of
suspension period as spent on duty or otherwise is a discretion which
the employer is entitled to exercise and in fact, is the domain of the
employer. To this extent, the judgements relied upon by the
Respondent need not be again referred to as the principle is fairly well
settled to be open to any debate. However, it is equally well settled
that discretion has to be judiciously exercised and an arbitrary exercise

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 24 of 26

Signing Date:03.06.2023

12:54:39

of discretion is open to interference by a Court in judicial review
under
Article 226
of the Constitution of India which is an equity
jurisdiction. The impugned order shows that the Respondent has not
exercised the jurisdiction judiciously and has applied the doctrine of
'no work no pay' without examining the facts of the present case. It is
true that the Petitioner was not working during the suspension period
but that was on account of the suspension order issued by the
Respondent since at that stage the criminal case was pending.
However, when the impugned order was passed, the facts were on
record and in knowledge of the Respondent that the criminal case had
resulted in an acquittal and the charge sheet in the departmental
proceedings stood quashed. At this stage, to invoke the doctrine of 'no
work no pay', in my view, was completely arbitrary and illegal.

Regulation 15(1)
and (3) of Regulations 1977 does entitle the
Respondent to deny back wages for the suspension period and/or
treating the period as not spent on duty, but by a plain reading of the
Regulation, it is clear that the provisions do not fetter grant of the said
reliefs. These are enabling provisions permitting the Respondent to
grant relief to an employee in case of full exoneration or where the
suspension period is unjustified. In light of the two judicial orders in
favour of the Petitioner, the question that begs an answer is whether
the exercise of discretion to deny reliefs to the Petitioner was judicious
and the answer can only be in the negative.

36. Learned counsel for the Respondent placed reliance on several
judgements of the Supreme Court which are
referred to above
in
paragraphs 13 and 14. The common thread that runs in the said
judgements is that in case the acquittal is not honourable, the

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 25 of 26

Signing Date:03.06.2023

12:54:39

employer has the discretion to deny benefits to the employee and the
grant of service benefit is not automatic. It bears repetition to state that
there can be no quarrel on this binding dictum of the Supreme Court.
However, in the facts of the present case and in the light of the two
judgements in favour of the Petitioner, one of this Court pertaining to
disciplinary proceedings and the other of the Trial Court with respect
to criminal proceedings, the Respondent cannot take the aid of these
judgements to deny the benefit of reliefs claimed by the Petitioner in
the present petition.

37. For all the aforesaid reasons, the writ petition is allowed
quashing the impugned order dated 21.01.2019 and holding that
Petitioner will be entitled to back wages for the suspension period,
minus the amounts paid towards subsistence allowance and the
suspension period from 17.12.1994 to 13.12.2000 will be treated as
spent on duty. Accordingly, this period will be computed towards
calculation of pensionary benefits and in light of this, Respondent is
directed to refix the salary and emoluments of the Petitioner from
1994 giving benefits of increments and pay revisions, wherever
applicable and release the arrears of pension calculated after taking six
additional years of service towards computation of pensionary
benefits.

38. Writ petition stands disposed of with no orders as to costs.

JYOTI SINGH, J
MAY 30 , 2023/kks/shivam

Signature Not Verified

Signed By:KAMAL KUMARW.P.(C) 10457/2019 Page 26 of 26

Signing Date:03.06.2023

12:54:39