Rajasthan High Court Restores LIC Employee’s Full Suspension Pay After Acquittal

Meena joined LIC in 1994 and was promoted to Clerk in 2006. He was suspended on 24 August 2009 following alleged involvement in a criminal case and received subsistence allowance. No departmental inquiry was initiated. After a full trial, he was acquitted because the prosecution failed to prove the charges beyond reasonable doubt. LIC revoked his suspension by an order dated 16 January 2014. On 29 January, it granted full suspension-period benefits under Rule 38(a), adjusting subsistence allowance. On 12 February, it withdrew that decision and invoked Rule 38(b), prompting the writ petition against that order and the appellate order of 22 November 2014. (Paras 1–8)

The Court read the suspension provisions in Rule 36 alongside the treatment of suspension periods under Rule 38. It held that clause (a) covered suspension attributable to a criminal case followed by acquittal, while clause (b) concerned cases involving disciplinary inquiry. LIC had initiated no such inquiry, either during suspension or after its revocation. (Paras 19–27)

The Court noted that “honourable acquittal” was not defined in LIC’s rules or used in the criminal procedure codes. It examined S. Samuthiram and Methu Meda on the judicial meaning of that expression. It also discussed the Bombay High Court’s Shri Sanjay decision, where an acquittal after full consideration of evidence could not be discounted merely because the trial court used “benefit of doubt”. (Paras 26–29, 31)

The judgment further quoted Ved Prakash Malhotra on judicial review of suspension-benefit decisions under comparable FCI regulations. Applying its reading to Meena’s circumstances, the Court found LIC’s interpretation of Rule 38(a) incorrect. It also drew an analogy with the removal of disqualifications under Section 12 of the Probation of Offenders Act. The relief concerns LIC’s rules and this case’s absence of disciplinary proceedings. (Paras 30–33)