ANDHRA BANK versus W.T. SESHACHALAM

Citation: [2004] 1 S.C.R. 145 · Decided: 05-01-2004 · Supreme Court of India · Bench: BRIJESH KUMAR · Disposal: Dismissed

Judgment (excerpt)

-
., 
ANDHRA BANK 
A 
v. 
W.T. SESHACHALAM 
JANUARY 5, 2004 
[BRIJESH KUMAR AND ARUN KUMAR, JJ.] 
B 
Service Law: 
Subsistence allowance-Third Bipartite Seulement as applicable to Bank 
employees-Entitlement to-Bank employee suspended on charges of criminal C 
misappropriation-Criminal case ended in acquittal of the employee-But 
departmental enquiry against the employee continued for years-Subsequently 
employee's services terminated-Employee not responsible for prolonging the 
enquiry-Held: Employee entitled to ji11/ salary as subsistence allowance from 
the date of acquittal till date of dismissal in terms of para 5(a){iii) of Third D 
Bipartite Seltlement-lndustrial Disputes Act, 1947, S. 18. 
The respondent was employed as a clerk in the appellant-Bank and 
was placed under suspension pending regular departmental action. 
Subsequently a charge sheet was filed against the respondent under Section 
409/436 of the Penal Code, 1860. The respondent was convicted by the E 
trial court but acquitted by the appellate court. After the acquittal of the 
respondent, an enquiry officer was appointed to hold an enquiry into the 
de11artmental proceedings, which continued for seven years and concluded 
in the respondent's dismissal. 
The respondent filed a writ petition before the High Court with a F 
prayer for payment of full salary as subsistence allowance in view of 
Clause S(a)(iii) of the Third Bipartite Settlement. The High Court held 
that the respondent was entitled to full salary as subsistence allowance 
from the _date of acquittal till the date of dismissal. The High Court also 
held that the respondent was not responsible for prolonging the enquiry. G 
Hence the appeal. 
On behalf of the appellant, it was contended that where enquiry was 
• '1 
entrusted to an outside agency and it was decided to prosecute the 
respondent he would not be entitled to full salary as subsistence allowance 
145 
H 
146 
SUPREME COURT REPORTS 
[200.f] I S.C.R. 
A even though the respondent was acquitted by the appellate court; and that 
the order of suspension and. the period following thereafter was one single 
indivisible period of suspension and it could not be compartmentalized as 
a period of suspension during the criminal case or the departmental action. 
B 
c 
The following question arose before the Court: 
"What amount, the appellant was liable to pay as subsistence 
allowance to the respondent during the period he remained under 
suspension., in the light of the provisions as contained in the Sastry Award, 
Desai A ward and the Third Bipartite Settlement on the subject as well as 
the rules of the bank?" 
Dismissing the appeal, the Court 
HELD: I.I. From a perusal of para 5 of the Third Bipartite 
Settlement, it is apparent that some special significance has been attached 
D where the enquiry is made by an outside agency and the case where it is 
not by an outsided agency. The other factor, which has been kept in 
consideration is the suspension during the departmental enquiry or the 
criminal prosecution. (151-GI 
1.2. From a reading of para 5 as a whole, three types of cases are 
E culled out. One where an outside agency may not be involved in the 
investigation. In that event for the first three months I/3rd of the pay and 
allowances would be payable as suspension allowance whereafter it would 
be increased to one-half of the pay and allowances and after one year full 
pay and allowances provided enquiry is not delayed for the reasons 
attributable to the workman concerned. The next category of cases would 
F be where inl'estigation is clone by an outside agency and the said agency 
comes to a conclusion not to prosecute the employee. In such a situation, 
the workman would be entitled to full pay and allowances after six months 
from the date of receipt of the report of the agency. The latter part as 
contained in Clause (a) (iii) of para 5 would cover cases of criminal nature. 
G This distinction is in view of the fact that investigation is not entrusted to 
outside agency namely, police and CBI for the departmental proceedings. 
Such cases would be covered by Clause (a)(i), (ii) and the first part of 
Clause (a) (iii). It is for the prosecution in a criminal case that investigation 
is entrusted to the outside agency, namely the police or CBI. Therefore, 
the latter part of Clause (a)(iii) relates to investigation for the purpose of 
H criminal prosecution. Even in such cases full pay and allowances are 
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:r· . 
ANDHR

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