An Employee Is Entitled To Subsistence Allowance Pending Inquiry: SC [Read Judgment]

The Supreme Court, on Thursday, ruled that an employee is entitled to subsistence allowance pending inquiry against him, opining that denial of financial resources would amount to depriving him of an opportunity to defend himself.

The Bench comprising Justice M.B. Lokur and Justice Deepak Gupta observed, "An employee is entitled to subsistence allowance during an inquiry pending against him or her but if that employee is starved of finances by zero payment, it would be unreasonable to expect the employee to meaningfully participate in a departmental inquiry.

Access to justice is a valuable right available to every person, even to a criminal, and indeed free legal representation is provided even to a criminal. In the case of a departmental inquiry, the delinquent is at best guilty of a misconduct but that is no ground to deny access to pension (wherever applicable) or subsistence allowance (wherever applicable)."

The Court was hearing an Appeal filed by UCO Bank, which had initiated disciplinary proceedings against its employee, Mr Rajendra Shankar Shukla for dishonor of cheque. The bank had alleged that Mr Shukla had "failed to discharge his duties with utmost integrity and honesty".

The Apex Court, however, agreed with the view taken by the High Court that in case a cheque issued by a bank employee is dishonored, action may be taken by the complainant under the provisions of the Negotiable Instruments Act, 1881. Such an act would not amount to a misconduct within the purview of the UCO Bank Officer Employees' (Conduct) Regulations, 1976, it ruled.

It further noted that Mr. Shukla was denied pension as well as subsistence allowance during the pendency of the inquiry, which prevented him from effectively participating in the disciplinary inquiry.

The Court then rapped the bank for filing the Appeal and imposed costs of Rs. 1 lakh on it, observing,

"However, we must observe that the learned Single Judge had held against the Bank and the Division Bench also held against the Bank. Notwithstanding this, the Bank preferred this appeal. The appeal was preferred despite at least two decisions delivered by this Court making the legal position clear. The Bank would have been well-advised to follow the law laid down by this Court rather than unnecessarily litigate against an employee who has superannuated. We have no doubt that Shukla must have spent a considerable amount in litigation. Accordingly, while dismissing the appeal, we impose costs of Rs. 1 lakh which will be paid to Shukla within 4 weeks from today towards his legal expenses."