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Employee Not Entitled To Full Back Wages On Acquittal, Unless His Prosecution Was Found Malicious

In CIVIL APPEAL No. 3339 of 2019, RAJ NARAIN vs UNION OF INDIA & ORS., Raj Narain, who was working as a Sorting Assistant in Railway Mail Service (RMS) was convicted in February 1997 by the Trial Court finding him involved in forged payments of high value money orders. He was dismissed from service with effect from the date of conviction. Later, the High Court, in 2001, allowed his appeal and acquitted him. After acquittal, the Tribunal as well as the High Court ordered payment of back wages  only to the period between the date of his acquittal and the date of his reinstatement but not from the date of removal from service as claimed by him.

He appealed before the Supreme Court quoting Ranchhodji Chaturji Thakore v. Superintendent Engineer, Gujarat Electricity Board and Union of India v. Jaipal Singh in support of his claim to contend that in case the criminal proceedings are initiated at the behest of the employer, and the employee is acquitted, he would be entitled to claim full wages for the period he was kept out of duty during the pendency of the criminal proceedings. 

The Supreme Court however observed that the judgment in Union of India and Others v. Jaipal Singh (supra) has to be understood in a manner in which the department would become liable for back wages in the event of a finding that the initiation of the criminal proceedings was mala fide or with vexatious intent. In all other cases, we do not see any difference between initiation of the criminal proceedings by the department vis-a-vis a criminal case lodged by the police. 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.


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