Karnataka HC Upholds Nearly 2 Years’ Back Wages For Suspended Bank Officer, Holding Suspension Counts As Duty When Final Penalty Is Not Removal Or Dismissal

The respondent, a Bank officer, was dismissed after a departmental enquiry concerning unaccounted cash of ₹60,000. The Appellate Authority set aside the dismissal and ordered a de novo enquiry. While that enquiry was pending, the respondent was suspended and later reinstated on 1 December 2003.

In an earlier writ petition, the High Court directed the Bank to pay wages “according to law” for the period from 17 November 2001 to reinstatement.

The de novo enquiry resulted in a penalty of reduction of basic pay by two stages, not dismissal. After further proceedings concerning the unpaid wages, the Single Judge directed payment calculated on basic pay of ₹11,410, with admissible allowances, and 6% interest. The Bank appealed, contending that the respondent was not entitled to wages for the suspension period.

Regulation 48(1) of the Karnataka Vikas Grameena Bank Officers and Employees’ Service Regulations, 2010, permits the Competent Authority, when imposing a penalty, to determine payment of the difference between subsistence allowance and the emoluments otherwise payable. Regulation 48(2) provides that a suspension period is to be treated as spent on duty if the employee is not removed or dismissed, subject to the Competent Authority’s direction.

The Court held that the words “or otherwise as the Competent Authority may direct” do not confer unfettered discretion to deny duty status where the employee has not been removed or dismissed.

Earlier court orders that have not been set aside cannot be reopened or contradicted in later proceedings.

The respondent was not dismissed or removed following the de novo enquiry; the penalty imposed was reduction of basic pay by two stages. The Court therefore construed Regulation 48(2) to require that the suspension period be treated as spent on duty.

It also noted that the earlier directions concerning payment of wages had remained undisturbed and that the Bank could not take a position inconsistent with those orders.

In those circumstances, the Bank’s reliance on the principle of “no work, no pay” did not warrant interference with the Single Judge’s order.

It found no basis to interfere with the Single Judge’s direction to pay wages calculated on basic pay of ₹11,410, together with admissible allowances and 6% interest. The writ appeal was dismissed.