A BANK EMPLOYEE AQUITTED IN APPEALLATE CRIMINAL PROCEEDINGS IS LIABLE TO BE PROCEEDED UNDER CLAUSE 19(3) (d) OF BIPARTITE SETTLEMENT, 1966

[Mr. M. GOVINDARAJAN]

‘The disciplinary action and procedure’ of the bank are guided by Chapter 19 of Bi partite Settlement, 1966. Clause 19.3 (b) provides that if an employee of the bank is convicted in a criminal case, such employee may be dismissed from service from the date of his conviction or may be inflicted with lesser form of punishment depending on gravity of charges. Clause 19(c) provides that if the employee be acquitted, it shall be open to the management to proceed against him under the provisions set out in Clauses 19.11 and 19.12 relating to discharges.  In the event of the management deciding after enquiry not to continue him in service, he shall be liable only for termination of service with three months’ pay and allowances in lieu of notice. He shall be deemed to have been on duty during the period of suspension, if any, and shall be entitled to full pay and allowances minus such subsistence allowances as he has drawn and to all other privileges for the period of suspension provided that he shall be acquitted by being given benefit of doubt he may be paid such portion of such pay and allowances as the management may deem proper, and the period of his absence shall not be treated as a period spent on duty unless the management so direct.

Clause 19(d) provides that if the employee prefers an appeal or revision application against his conviction and is acquitted, in case he had already been dealt with as above and he applies to the management for reconsideration of his case, the management shall review his case and may either reinstate him or proceed against him under the provisions in clause 19.11 and 19.12. In the event of the management deciding, after enquiry not to continue him ins service, the employee shall be liable only for termination with three months’ pay and allowance in lieu of notice.

The provisions of Sec. 19(d) stated above is confirmed by the Supreme Court in ‘Sushila Tiwari and others V. Allahabad Bank and Others’ – 2012-IV-LLJ-289 (SC).  In this case Shri Tiwari was working as Special Assistant in the Allahabad Bank. He was suspended on 11.06.1990 for his certain acts of omission and commission.  Two charge sheets were issued on him.  The bank also decided simultaneously to prosecute the employee in a criminal case for the criminal act and lodged an FIR with the police station.   The employee was convicted by the Sub Divisional Judicial Magistrate and order to undergo rigorous imprisonment for one year for the offence punishable under Section 468 IPC and rigorous imprisonment for one year for the offence punishable under Section 477(A) IPC. taxmanagementindia.com

The bank dismissed the employee from the service after giving him a reasonable opportunity of being heard.

Against the order of conviction the employee filed an appeal before District Court. The appellate court discharged the employee from the charges. On this the employee informed the bank about his acquittal and requested to his reinstatement.  The bank, on receipt of such intimation, invoked clause 19.3(c) of the Bi-partite Settlement ordered that the employee would be deemed to have been placed under suspension from the date of original order of dismissal and continue to remain under suspension until further order. During the period of suspension the employee would be entitled to subsistence allowance on the same scale as was getting just prior to his dismissal. The said order was communicated to the employee.

In the departmental enquiry initiated against the employee the employee did not choose to participate. He appeared before the Enquiry Officer only once but he refused to appear before the enquiry officer.   He filed a writ petition before the High Court challenging the order of suspension and enquiry.  The High Court directed the employee to put forth his arguments before the enquiry officer. 

The disciplinary authority found that the employee refused to attend the enquiry. The reports of the enquiry revealed that the charges leveled against the employee were found true.  The disciplinary authority issued a notice to the employee as to why his services may not be terminated and he was advised to appear in person with or without his Defence assistant before the disciplinary authority. After giving opportunity to the employee the services of the employee was terminated.

Against the order of termination the employee filed a writ petition before the High Court. During the pendency of the writ petition the employee died and was substituted by his legal heirs. The Single Judge has taken into consideration of te gravity of the charges and the fact that the amount which was embezzled by the employee with the bank refused to entertain the writ petition and dismissed the same. The Division Bench of the High Court, on appeal of the employee, confirmed the order of the Single Judge. The employee filed the present appeal before the Supreme Court.

Before the Supreme Court the appellant submitted the following:

• Without reinstating the original writ petitioner no departmental enquiry would be initiated;
• In view of clause 19.3(c), the original writ petitioner was entitled to full pay and allowances minus the subsistence allowance and all other privileges for the period of suspension which was denied to him;
• The High Court ought to have considered that the departmental enquiry had been conducted and concluded ex-parte, hence in all probability, it would have been fair enough to grant at least one more opportunity to the legal heirs of the employee to participate in the departmental enquiry and prove the innocence of the employee;
• The High Court ought to have considered that the impugned order of dismissal is void, having been passed without their being any master and servant relationship existing at the time of passing of the order against the delinquent in absence of order of reinstatement.

The bank submitted the following before the Supreme Court that in view of the order the employee was deemed to have been reinstated and in terms of clause 19.3(d) the employee was deemed to be on duty on the bank from the date order of suspension was issued.

The Supreme Court analyzed the provisions of Bi-partite Settlement and held that if clause 19.3(d) is read along with the notice issued to the employee it is clear that the employee stood reinstated on the date on which he was originally dismissed from service and deemed to be continuing under suspension since then.   For the reasons the stand taken by the appellant was not reinstated before departmental proceedings is fit to be rejected and the employee was entitled for subsistence allowance and not the full pay and allowances as requested.