An employer cannot be forced to pay full back wages to a staff member acquitted of a criminal charge unless the prosecution itself was mala fide by a court, the Supreme Court has reiterated in a judgment.
“A department would become liable for back wages [of an employee] in the event of a finding that the initiation of the criminal proceedings was mala fide or with vexatious intent... For example, if an employee is involved in embezzlement of funds or is found indulging in demand and acceptance of illegal gratification, the employer cannot be mulcted with full back wages on the acquittal of the person by a criminal court, unless it is found that the prosecution is malicious,” a Bench of Justices L. Nageswara Rao and M.R. Shah observed in a recent verdict.
The court reasoned that an employee involved in a crime has disabled himself from rendering his services on account of his incarceration in jail. Subsequent acquittal by an appellate court would not entitle him to claim back wages.
Appeal by ex-staff
The judgment came on the appeal by a former Railway Mail Service employee, Raj Narain, who was placed under suspension in 1979 on allegations of involvement in forged payments of high-value money orders.
An FIR was also lodged against him in the Mughalsarai police station in Uttar Pradesh. The order of suspension was revoked in 1987, pursuant to which he had joined duty and worked till 1997, when he was dismissed from service in view of his conviction for criminal offences, including criminal breach of trust and cheating. He was sentenced to imprisonment for three years. However, he was acquitted by an appellate court in 2002.
The appellant moved the Supreme Court for payment of his full back wages for the period between his suspension in 1979 till its revocation in 1987.