Facts: The Petitioner, a Medical Officer with the Municipal Corporation of Greater Mumbai (MCGM), was arrested by the Anti-Corruption Bureau (ACB) in 1986 for allegedly accepting a bribe. Consequently, he remained under suspension from 29 November 1986 to 9 May 1990. Although he was eventually acquitted of all charges in 1989 and reinstated in 1990, the MCGM refused to treat his suspension period as "on duty" for the purpose of full pay and allowances. Instead, the Municipal Commissioner regularized the 1257-day suspension period by adjusting it against the Petitioner's earned leave and half-pay leave, treating the remainder as leave without pay. The Petitioner challenged this decision, seeking full backwages and for the period to be treated as duty for all purposes, especially since he was later compulsorily retired in 2005 following a second, separate ACB trap.
Procedural Posture: The Petitioner filed a Writ Petition under Article 226 of the Constitution of India before the Bombay High Court, seeking a direction to the Respondents to treat the 1986–1990 suspension period as duty and grant full pay and allowances.
Issue: Whether a municipal employee is automatically entitled to full salary and allowances for a suspension period upon acquittal in a criminal trial, and whether the Competent Authority has the discretion to treat such a period as leave instead of duty.
Holding: No, the Petitioner is not automatically entitled to full backwages. The Court upheld the Competent Authority's discretion to regularize the suspension period as leave.
Reasoning: The Court reasoned that under Regulation 75 of the Mumbai Municipal Corporation (Service) Regulations, 1989, the payment of full salary is not an automatic consequence of acquittal. Distinguishing between cases where the employer initiates prosecution (e.g., misappropriation) and cases where an employee is arrested for private or criminal conduct (e.g., bribery traps), the Court noted that the employer should not be saddled with the financial burden of "no work" when the employee's own conduct led to the incarceration. Relying on "Krishnakant Raghunath Bibhavnekar vs. State of Maharashtra", the Court held that the Disciplinary Authority has the legal right to consider the circumstances and deny full backwages. Since the Petitioner was embroiled in criminal proceedings not at the behest of the MCGM, the principle of "no work no pay" was applicable. The regularization of the period into various kinds of leave was deemed a valid exercise of discretionary power.