Acquittal Of Employee In Criminal Case Does Not Automatically Entitle Him To Full Pay & Back Wages For Suspension Period: Bombay High Court

The Bombay High Court has held that the acquittal of an employee in a criminal case does not automatically entitle him to full pay and back wages for the period of suspension. The Court observed that entitlement to full salary depends on the facts and circumstances of each case and the discretion exercised by the competent authority under applicable service regulations.

A division bench of Justices S.M. Modak and Sandeep V. Marne was hearing a writ petition filed by a municipal employee seeking treatment of his suspension period as duty, along with full pay and allowances. The petitioner, a Medical Officer with the Municipal Corporation of Greater Mumbai, was suspended between 29 November 1986 and 9 May 1990 after being arrested by the Anti-Corruption Bureau on charges of accepting illegal gratification, though he was later acquitted and reinstated. After the acquittal, the Municipal Corporation reinstated the petitioner but decided to treat the suspension period as a combination of earned leave, half-pay leave, and leave without pay. The petitioner contended that the entire period ought to be treated as duty with full salary and allowances.

The Court examined Regulation 75, which mandates that upon reinstatement, the competent authority must decide both the pay and allowances payable for the suspension period and whether such period should be treated as duty. It noted that full pay is payable only where the authority concludes that the suspension was wholly unjustified, whereas in other cases, partial pay or conversion of the period into leave is permissible.

The Court held that mere acquittal in a criminal case does not automatically render the suspension unjustified. It observed that where an employee is prosecuted for acts such as bribery and is suspended due to arrest, the employer cannot be saddled with the financial burden of full wages, especially when the prosecution is not initiated at the employer's instance.

“Upon acquittal of a suspended employee, though reinstatement is guaranteed, payment of full salary cannot be an automatic consequence. It depends on facts and circumstances of each case… in cases where the arrest and detention results in suspension in bribery cases, the employer cannot be saddled with the financial burden of paying full salary and allowances since the suspended employee embroils himself in the prosecution,” the Court observed.

The Court also noted that in the present case, the petitioner had been prosecuted twice on allegations of corruption and that his suspension was a consequence of his own involvement in criminal proceedings. It found that the Municipal Commissioner had considered the relevant facts and exercised discretion appropriately in converting the suspension period into different kinds of leave.

Holding that no arbitrariness or illegality was demonstrated in the decision of the competent authority, the Court declined to interfere with the impugned order.

Accordingly, the writ petition was dismissed, and the decision to deny full back wages for the suspension period was upheld.

Case Title: Dr. Lalchand N. Jumani v. Municipal Corporation of Greater Mumbai & Ors. [Writ Petition No. 1137 of 2014]

Citation: 2026 LiveLaw (Bom)156

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