Reserve Bank Of India vs Bhopal Singh Panchal on 3 November, 1993 Equivalent citations: 1994 AIR 552, 1994 SCC (1) 541, AIR 1994 SUPREME COURT 552, 1993 AIR SCW 4044, 1994 LAB IC 80, (1993) 8 SERVLR 544, (1994) 1 LAB LN 552, (1994) 1 SCT 505, 1994 SCC (L&S) 594 Author: P.B. Sawant Bench: P.B. Sawant, S. Mohan, S.P Bharucha PETITIONER: RESERVE BANK OF INDIA Vs. RESPONDENT: BHOPAL SINGH PANCHAL DATE OF JUDGMENT03/11/1993 BENCH: SAWANT, P.B. BENCH: SAWANT, P.B. MOHAN, S. (J) BHARUCHA S.P. (J) CITATION: 1994 AIR 552 1994 SCC (1) 541 JT 1993 (6) 266 1993 SCALE (4)360 ACT: HEADNOTE: JUDGMENT: The Judgment of the Court was delivered by SAWANT, J.- The respondent-employee was employed with the appellant-Bank in its New Delhi office as Coin/Note Examiner, Grade-II having joined service on March 5, 1969. On September 7, 1974 a criminal case was registered against him under Section 302 IPC and he was arrested for the offence on September 18, 1974. On his arrest, the Bank Reserve Bank Of India vs Bhopal Singh Panchal on 3 November, 1993  1 placed him under suspension under Regulation 46(1) of the Reserve Bank of India (Staff) Regulations, 1948 (hereinafter referred to as the 'Regulations'). On December 13, 1976, the employee was convicted by the Sessions Court for the offence under Section 304 Part I of the IPC and sentenced to 8 years' rigorous imprisonment. On receipt of the court's judgment, the Bank dismissed the employee from service w.e.f. April 28, 1977 in terms of Regulation 46(3) of the Regulations. In appeal filed by the employee against his conviction, the High Court on November 21, 1977 acquitted him of the offence, giving him the benefit of doubt. 2.The Bank relied on Regulation 46(4) of the Regulations and refused to reinstate the employee in service on the ground that he had not earned an honorable acquittal of the offence. The respondent-employee, therefore, raised an industrial dispute which was decided on May 19, 1983, by the Central Government Industrial Tribunal. By the said award, the Industrial Tribunal held that Regulation 46(4) was invalid and improper and militated against industrial jurisprudence as developed and applied by the courts in the country. The Tribunal further held that the dismissal was unjustified and quashed the same and ordered the Bank to reinstate the employee with full back wages and to allow him continuity in service as if he was never dismissed from service. 3.After the award of the Tribunal, the Bank reinstated him in service by its order of August 24, 1983 and treated him as on duty during the period from April 28, 1977 to August 23, 1983 and paid him admissible back wages for that period. The employee received Rs 1,00,421.74 towards back wages for the said period. 4.Thereafter, the employee filed the present application before the Central Government Labour Court under Section 33- C(2) of the Industrial Disputes Act (hereinafter referred to as the 'Act') claiming difference in the amount paid to him as subsistence allowance during the period of suspension from September 18, 1974 till the date of his dismissal, viz., April 28, 1977 and full pay and allowances which, according to him, were payable for the said period. He further claimed that he was entitled to increments during the period he was under suspension and prayed for arrears of salary on that account also. He also claimed that his pay on reinstatement had to be fixed taking into account the increments earned by him between the date of his suspension and dismissal. Thus the employee claimed Rs 34,742.75 in all as shown by him in his application. The Bank contested the claim and asserted that the suspension had followed the employee's arrest and it was effective from September 18, 1974 till April 27, 1977 during which period he was paid his subsistence allowance. The Bank also contended that the Tribunal's award had not allowed him full payment for the period of suspension and that the period of suspension continued to be governed by the office order dated April 28, 1977 which read as follows: "The order of suspension passed in respect of Shri Bhopal Singh Panchal, Coin/Note Examiner Grade-II, placing him under suspension with effect from the afternoon of September 18, 1974 pursuant to Regulation 46(1) of the Reserve Bank of India (Staff) Regulations, 1948 vide this Office Order No. 593/74-75 dated October 11, 1974, is revoked with effect from the forenoon of April 28, 1977. The period of suspension has been regularised in the following manner, namely: Reserve Bank Of India vs Bhopal Singh Panchal on 3 November, 1993  2 (a) 18th September to 5th by grant of ordinary October 1974 leave (b) 6th October 1974 to by grant of extraordinary 27th April 1977 leave without pay and allowances, not counting for increment." 5. The Labour Court negatived the Bank's objection and upheld the claim of the employee and granted an amount of Rs 33,281.50, which was agreed to by the Bank as the correct amount if the employee's claim was accepted. It is this order of the Labour Court dated March 29, 1985 which is impugned in the present appeal. 6. The short question that falls for consideration is whether the order of suspension is automatically set aside on the reinstatement and whether the management cannot deal with the period of suspension according to the regulations governing the service conditions. We may, in the first instance, refer to the relevant regulation on which the Bank has relied, viz., Regulation 46 which reads as under: "46. Employees arrested for debt or on criminal charge.- (1) An employee who is arrested for debt or on a criminal charge or is detained in pursuance of any process of law, may, if so directed by the competent authority, be considered as being or having been under suspension from the date of his arrest, or, as the case may be, of his detention, up to such date or during such period, as the competent authority may direct. In respect of the period in regard to which he is so treated, he shall be allowed the payment admissible to an employee under suspension under sub-regulation (4) of Regulation 47. (2) Any payment made to an employee under sub-regulation (1) shall be subject to adjustment of his pay and allowances which shall be made according to the circumstances of the case and in the light of the decision as to whether such period is to be accounted for as a period of duty or leave: Provided that full pay and allowances will be admissible only if the employee- (a) is treated as on duty during such period; and (b) is acquitted of all blame or satisfies the competent authority, in the case of his release from detention or of his detention being set aside by a competent court, that he had not been guilty of improper conduct resulting in his detention. (3) An employee shall be liable to dismissal or to any of the other penalties referred to in Regulation 47 if he is committed to prison for debt or is convicted of an offence which in the opinion of the competent authority, either involves gross moral turpitude or has a bearing on any of the affairs of the Bank or on the discharge by the employee of his duties in the Bank; the opinion in this respect of the competent authority shall be conclusive and binding on the employee. Such dismissal or other penalty may be imposed as from the date of his committal to prison or conviction and nothing in Regulation 47 shall apply to such imposition. Reserve Bank Of India vs Bhopal Singh Panchal on 3 November, 1993  3 (4) Where an employee has been dismissed in pursuance of subregional (3) and the relative conviction is set aside by a higher court and the employee is honorably acquitted, he will be reinstated in service. Explanation.- In this Regulation committal or conviction shall mean committal or conviction by the lowest court or any appellate court. (5) Where the absence of an employee from duty without leave or his over steal is due to his having been arrested for debt or on a criminal charge or to his having been detained in pursuance of any process of law, the provisions of Regulation 39 shall also apply, and for the purposes of that Regulation as so applied, the employee shall be treated as having absented himself without leave or, as the case may be, overstayed, otherwise than under circumstances beyond his control." 7. The other regulations which need to be considered in this connection are Regulations 39 and 47. The relevant provisions of the said regulations are as follows: "39. Employees not to be absent from duty without permission or be late in attendance.- (1) An employee shall not absent himself from his duties without having first obtained the permission of the competent authority, nor shall he absent himself in case of sickness or accident without submitting a sufficient medical certificate: Provided that in the case of temporary indisposition the production of a medical certificate may, at the absolute discretion of the competent authority, be dispensed with. (2) An employee who absents himself from duty without leave or overstays his leave, except under circumstances beyond his control for which he must tender a satisfactory explanation, shall not be entitled to draw any pay and allowances during such absence or overstayal and shall further be liable to such disciplinary measures as the competent authority may impose. The period of such absence or overstayal may, if not followed by discharge under Regulation 22 or termination of services under Regulation 25 or dismissal under Regulation 47, be treated as period spent on extraordinary leave. 47.(1) (4) An employee may be placed under suspension by the officer empowered to pass the final order under this regulation. During such suspension, he shall receive subsistenc e allowance equal to- (i) his substantive pay plus twenty-five per cent thereof, for first six months of suspension; (ii) his substantive pay plus fifty per cent thereof for next six months of suspension; and (iii) his substantive pay plus seventy five per cent thereof for the period of suspension beyond one year: Reserve Bank Of India vs Bhopal Singh Panchal on 3 November, 1993  4 Provided that the enhanced rate of subsistence allowance prescribed under sub-clauses (ii) and (iii) shall be admissible only if the enquiry is not delayed for reasons attributable to the concerned employee or any of his representatives: Provided further that if no penalty under clauses (b), (c), (d) or (e) of sub-regulation (1) is imposed the employee shall be refunded the difference between the subsistence allowance and the emoluments which he would have received." 8. The provisions of the Regulations show that Regulation 46 is a self contained provision for dealing with an employee's absence from duty when he is arrested either for debt or on a criminal charge or when he is detained in pursuance of any process of law. Sub-regulation (1) of that Regulation suggests that when the employee is absent from duty on account of any of the three reasons mentioned there, he may be considered as being under suspension from the date of his arrest or his detention till such date as the competent authority may direct in that behalf. The sub- regulation further provides that when the competent authority directs his suspension, the employee is entitled to such subsistence allowance as is admissible to the employee under suspension under sub-regulation (4) of Regulation 47. Regulation 47 thus comes in the picture only for the purpose of determining the amount of subsistence allowance payable to such employee and further only when the competent authority directs that such employee should be treated as being under suspension during the period of his absence. 9. Sub-regulation (2) of Regulation 46 then makes clear that the subsistence allowance paid to such employee under sub-regulation (1) is subject to adjustment of tile employee's pay and allowances. That adjustment is to be made according to the circumstances of each case and in the light of the decision taken by the competent authority as to whether the period of absence is to be treated as a period on duty or on leave. The proviso to sub-regulation (2) then states that the employee shall be entitled to full pay and allowances only if two conditions are satisfied, viz., that the competent authority has treated him as on duty during such period and he is acquitted of all blame when he is arrested for debt or in connection with a criminal charge, and when he is detained otherwise he satisfies the competent authority that he had not been guilty of improper conduct resulting in his detention. In other words, his acquittal even if it is without blame or his release from detention even if his arrest is not on account of improper conduct on his part, does not automatically entitle the employee to full pay and allowances. The competent authority has to pass an order in each case taking into consideration all circumstances to treat the period of absence as period on duty before full pay and allowances become admissible to the employee. 10. Sub-regulation (3) of the said regulation then gives power to the competent authority to inflict on such employee any of the penalties mentioned in Regulation 47(1) which includes the penalty of dismissal. The employee becomes liable to such penalty under two circumstances, viz., if he is (i) committed to prison for debt, or (ii) convicted of an offence which in the opinion of the competent authority either involves gross moral turpitude or has a bearing (a) on any of the affairs of the Bank, or (b) on the discharge by the employee of his duties in the Bank. The sub- regulation further makes it clear that the opinion of the competent authority in this respect shall be conclusive and binding on the employee. The sub-regulation then states that the dismissal or the other penalty that may be Reserve Bank Of India vs Bhopal Singh Panchal on 3 November, 1993  5 imposed on the employee, may be so imposed from the date of his committal to prison for debt or from the date of his conviction, as the case may be. The conviction referred to in this sub-regulation is the conviction by the first or the lowest court or any appellate court. 11. Sub-regulation (4) of the said regulation states that when an employee has been dismissed on account of his conviction by the lower court, he is entitled to be reinstated in service if (a) the conviction is set aside by the higher court and (b) the employee is honourably acquitted. A mere acquittal does not entitle an employee to reinstatement in service. The acquittal has to be an honourable one. 12. Sub-regulation (5) of the said regulation then prescribes the manner in which the absence from duty of such employee will be treated. It states that when the absence of such employee is without leave or is on account of his overstayal of leave, the provisions of Regulation 39 shall apply to such absence. Further, while applying the provisions of Regulation 39, such absence of the employee shall be treated as not being under circumstances beyond the employee's control. Sub-regulation (2) of Regulation 39 lays down the procedure for treating the absence of the employee from duty. According to this procedure, an employee who absents himself from duty without leave or overstays his leave, is not entitled to draw any pay and allowances during such absence or overstayal. The only exception to this rule is when the employee's absence without leave or his overstayal is under circumstances beyond his control for which circumstances, again, he has to tender a satisfactory explanation. As has been pointed out earlier, subregulation (5) of Regulation 46 expressly makes it clear that the absence of an employee who is arrested for debt or on a criminal charge or who is detained, is not to be treated as an absence on account of circumstances beyond his control. Regulation 39(2) then makes it clear that if such absence or overstayal of the employee is not followed by discharge under Regulation 22 or termination of services under Regulation 25 or dismissal under Regulation 47, it is to be treated as period spent on extraordinary leave. Since sub-regulation (5) of Regulation 46 states that the provisions of Regulation 39 shall apply to the employee whose absence is on account of his arrest for debt or a criminal charge or on account of his detention, it follows that such absence would also have to be treated as period spent on extraordinary leave when the absence is not followed by discharge, termination of service or dismissal, as the case may be. 13. The above analysis of the relevant provisions of the Regulations, therefore, shows, firstly, that the employee who is absent from duty on account of his arrest for debt or on a criminal charge or on account of his detention, is not to be considered to be absent on account of circumstances beyond his control. His absence throughout such period is to be treated as period spent on extraordinary leave when the absence is not followed by discharge, termination of service or dismissal, as the case may be. In the present case, respondent-employee was arrested for criminal offence under Section 302 IPC. He was, however, convicted by the Sessions Judge on December 13, 1976 under Section 304, Part 1, IPC. After the copy of the judgment of the Sessions Judge became available he was dismissed from service w.e.f. April 28, 1977. The order passed by the Bank on that day has been reproduced above. By that order the Bank, among other things, revoked the order of suspension and treated the period of suspension from (a) September 18, 1974 to October 5, 1974 as on ordinary leave and the period (b) from October 6, 1974 to April 27, 1977 as on extraordinary leave without pay Reserve Bank Of India vs Bhopal Singh Panchal on 3 November, 1993  6 and allowances and as a period not counted for increment. When the High Court acquitted the respondent-employee by its order of November 21, 1977 giving the benefit of doubt, the Bank rightly refused to reinstate him in service on the ground that it was not an honourable acquittal as required by Regulation 46(4). 14. The employee then raised an industrial dispute and the Industrial Tribunal, as stated above, by its award dated May 19, 1983 directed his reinstatement in service with full back wages and continuity in service as if he was never dismissed from service. While doing so, the Tribunal also held that Regulation 46(4) was invalid. It is not necessary for us in these proceedings to decide as to whether the Tribunal had jurisdiction to hold the sub-regulation invalid. The Bank, for reasons which are not known, did not prefer any further proceedings against the said award and by its order of August 24, 1983 reinstated the employee treating him as on duty during the period from April 28, 1977, i.e. the date of his dismissal, till August 23, 1983 and paid him admissible back wages for that period. As a matter of fact, in view of Regulation 46(5) read with Regulation 39(2) even if the employee was reinstated in service, it was competent for the Bank, in the circumstances of the case, to treat the employee as having absented himself without leave and to treat the said period as being spent on extraordinary leave, as explained above. However, since the Bank has already implemented the award, the only question that falls for our consideration in the present application under Section 33-C(2) of the Act is whether the period from the date of suspension, i.e. September 18, 1974 till the order of dismissal, i.e. April 28, 1977 is entitled to be treated as a period on duty with full pay and allowances. 15. We have already pointed out the effect of the relevant provisions of Regulations 39, 46 and 47. The said regulations read together, leave no manner of doubt that in case of an employee who is arrested for an offence, as in the present case, his period of absence from duty is to be treated as not being beyond circumstances under his control. In such circumstances, when he is treated as being under suspension during the said period, he is entitled to subsistence allowance. However, the subsistence allowance paid to him is liable to be adjusted against his pay and allowances if at all he is held to be entitled to them by the competent authority. The competent authority while deciding whether an employee who is suspended in such circumstances is entitled to his pay and allowances or not and to what extent, if any, and whether the period is to be treated as on duty or on leave, has to take into consideration the circumstances of each case. It is only if such employee is acquitted of all blame and is treated by the competent authority as being on duty during the period of suspension that such employee is entitled to full pay and allowances for the said period. In other words, the Regulations vest the power exclusively in the Bank to treat the period of such suspension on duty or on leave or otherwise. The power thus vested cannot be validly challenged. During this period, the employee renders no work. He is absent for reasons of his own involvement in the misconduct and the Bank is in no way responsible for keeping him away from his duties. The Bank, therefore, cannot be saddled with the liability to pay him his salary and allowances for the period. That will be against the principle of 'no work, no pay' and positively inequitable to those who have to work and earn their pay. As it is, even during such period, the employee earns subsistence allowance by virtue of the Regulations. In the circumstances, the Bank's power in that behalf is unassailable. Reserve Bank Of India vs Bhopal Singh Panchal on 3 November, 1993  7 16. Further, the Labour Court while acting under Section 33-C(2) of the Act had no jurisdiction to decide the said question. Since the Labour Court in the present case took upon itself the task of deciding the said question, it clearly exceeded its jurisdiction. The order of the Labour Court is, therefore, liable to be set aside. 17. In the circumstances, we allow the appeal and set aside the impugned order of the Labour Court. There will, however, be no order as to costs. Reserve Bank Of India vs Bhopal Singh Panchal on 3 November, 1993  8