Reinstatement after conviction is set aside, with continuity preserved and back wages limited to the period after acquittal.

Termination based solely on a criminal conviction under Section 138 of the Negotiable Instruments Act loses its foundation once that conviction is set aside, and reinstatement with continuity of service is ordinarily justified. The service regulation cited on the record did not supply an independent basis to refuse reinstatement where the employee's conviction had been reversed. On back wages, acquittal does not automatically create an entitlement to salary for the entire intervening period; the award depends on the facts and the employer's response after acquittal. In these circumstances, back wages were confined to the period from acquittal until superannuation, and the earlier 50% back-wage award was not sustained.

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Issues: (i) Whether the employee's termination, founded solely on conviction under Section 138 of the Negotiable Instruments Act, could be sustained after the conviction was set aside and reinstatement with continuity of service directed; (ii) whether the award of 50% back wages was sustainable and what back wages, if any, were payable.

Issue (i): Whether the employee's termination, founded solely on conviction under Section 138 of the Negotiable Instruments Act, could be sustained after the conviction was set aside and reinstatement with continuity of service directed.

Analysis: The termination rested only on the criminal conviction. Once the conviction was set aside, the sole basis for the termination ceased to exist. The petitioner did not establish any rule or authority showing that reinstatement could be denied merely because the acquittal was said to be on compounding. Rule 81 of the service regulations did not, on the record before the Court, furnish any basis to refuse reinstatement after the conviction was reversed. The acquittal therefore removed the foundation of the dismissal, and the direction for reinstatement with continuity of service was warranted.

Conclusion: The direction for reinstatement with continuity of service was upheld and remained in force.

Issue (ii): Whether the award of 50% back wages was sustainable and what back wages, if any, were payable.

Analysis: Mere acquittal does not automatically confer a right to salary for the intervening period, and back wages depend on the legal and factual context. Here, the employee was not removed for proved misconduct after departmental inquiry, but because of a conviction that was later set aside. The employer was informed of the acquittal yet did not restore the employee to service, although the reason for termination had disappeared. In these circumstances, back wages from the date of acquittal till superannuation were justified, but the grant of 50% back wages for the earlier period was not supported.

Conclusion: The award of 50% back wages was set aside, and full back wages were directed only from the date of acquittal till superannuation.

Final Conclusion: The challenge succeeded only in part: reinstatement with continuity was maintained, the earlier limited back-wage award was deleted, and monetary relief was confined to the period after acquittal until retirement.

Ratio Decidendi: Where termination is founded solely on a criminal conviction, reversal of that conviction removes the basis of termination and ordinarily requires reinstatement with continuity, while back wages are to be limited according to the equities and the employer's conduct after acquittal.

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