2005 (1) TMI 412 - HC - Companies Law

Court orders reinstatement with full benefits including increments for suspended employee.

The court ruled in favor of the applicant, directing the Official Liquidator to re-fix the pay scale to include the increments the applicant would have ... Official liquidator - Employment of additional or special staff Issues:1. Re-fixation of pay scale including increments for an employee reinstated after suspension without departmental inquiry.Analysis:The judgment pertains to an application filed under rules 308 and 309 of the Companies (Court) Rules regarding the re-fixation of pay scale for an employee who was suspended and later reinstated without any departmental inquiry. The applicant, who was suspended in 1992 following complaints and a criminal prosecution, was acquitted by the Metropolitan Magistrate Court. Upon reinstatement by the Company Judge in 2003, the applicant was denied back wages and directed to refund the subsistence allowance enjoyed during the suspension period. The applicant sought re-fixation of pay scale to include increments granted to other continued staff in the same cadre during the suspension period.The applicant argued that no punishment was imposed, and no departmental proceedings were initiated against him. His suspension was a result of the criminal charge and trial, and his reinstatement was based on the acquittal without a departmental inquiry. The denial of back wages was justified on the grounds of the applicant working elsewhere during suspension, and he was asked to refund the subsistence allowance.On the other hand, the Official Liquidator contended that the applicant was not entitled to increments during the suspension period as he was not actively working. The Official Liquidator argued that even in the case of long leave, employees cannot claim increments upon resuming duty.The court considered both arguments and found the Official Liquidator's contention meritless. The court held that once reinstated, the applicant should be treated as continuously employed without any punishment imposed due to the absence of a departmental inquiry. Denying the applicant his regular increments, which were granted to other staff in the same cadre, would be unjust and akin to inflicting punishment without due process. The court emphasized that employees cannot be deprived of benefits without a proper departmental inquiry and subsequent disciplinary action. Therefore, the applicant was entitled to all increments granted to other employees in similar positions during the suspension period.Consequently, the court made the petition absolute, directing the Official Liquidator to re-fix the pay scale of the applicant within three weeks to include the increments he would have received if not for the suspension, as per prayer clause (b) of the petition.