No Legally Sustainable Difference Between Honourable & Other Acquittals For Granting Service Benefits Under LIC (Staff) Rules: Rajasthan High Court

The Court was hearing a writ petition challenging the disciplinary and appellate orders by which the Life Insurance Corporation of India treated the employee’s suspension period as time not spent on duty and denied him full pay and allowances beyond the subsistence allowance already paid.

A Bench of Justice Anand Sharma observed: “… it would be quite an anomalous and legally untenable situation, where at the one hand a person like petitioner is there, who has been acquitted of all the criminal charges, yet the benefits have been withheld by the respondents narrating his acquittal as not Honourable and while on the other hand, in spite of there being a sustained conviction in the record of another employee, yet he was granted benefit of probation by the Competent Court, he cannot be deprived of the benefits arising out of his service conditions, including the benefits during suspension period”.

Thus, the Bench added, “under the circumstances, where there is no legally sustainable difference between 'acquitted Honourably' and an acquittal for any other reason, for the purpose of grant of service benefits, this Court finds that the respondents have wrongly interpreted Rule 38(a) of the Rules of 1960., … the petitioner is entitled for all the benefits including full pay and allowances during the aforesaid suspension period.”

Advocates Rajendra Rathore appeared for the petitioner. Advocate Puneet appeared for the Life Insurance Corporation of India.

Background

The petitioner joined the Life Insurance Corporation of India as a Class IV employee and was subsequently promoted as a clerk. He was suspended solely because of his alleged involvement in a criminal case, while no departmental inquiry was initiated against him.

After a full trial involving oral and documentary evidence, the criminal court acquitted him because the prosecution failed to prove the charges beyond reasonable doubt. The suspension was thereafter revoked.

The competent authority initially invoked Rule 38(a) of the Life Insurance Corporation of India (Staff) Rules, 1960, treated the suspension period as duty and granted full pay and allowances after adjusting the subsistence allowance.

Shortly afterwards, the Senior Divisional Manager cancelled that order without issuing notice to the employee. The subsequent order invoked Rule 38(b), treated the suspension period as time not spent on duty and denied the remaining pay and allowances on the ground that the acquittal was based on the benefit of doubt and was not “honourable”. The departmental appeal was also disposed of without granting the claimed benefits.

Court’s Observations

The Court observed that Rule 36 of the Life Insurance Corporation of India (Staff) Rules, 1960 permits suspension where disciplinary proceedings are contemplated or pending and where a criminal offence is under investigation or trial.

The Bench stated that Rule 38(a) applied to an employee suspended because of a criminal case and subsequently acquitted. Rule 38(b), on the Court’s interpretation, governed cases involving the disciplinary, appellate or reviewing authority and was confined to circumstances involving disciplinary proceedings.

The Bench remarked: “On close scrutiny of both clauses (a) and (b) of Rule 38 in the context of two contingencies prescribed under Rule 36 for placing an employee under suspension, this Court finds that clause (a) of Rule 38 is exclusively related to the cases, where the employee was placed under suspension due to criminal case and the benefits are to be paid upon revocation of suspension after acquittal by the Competent Criminal Court. Whereas, language employed in clause (b) of Rule 38 makes it clear that it would apply in the cases not covered by clause (a) of Rule 38.”

The Court added that the petitioner had been suspended solely because of the criminal proceedings and that no departmental inquiry was initiated either during the suspension or after his acquittal.

The Bench observed: “Facts are almost undisputed that the petitioner was placed under suspension solely on the ground of his involvement in the criminal case and admittedly, no departmental enquiry whatsoever was initiated against him.”

The Court consequently found that the Corporation could not rely on Rule 38(b) to deny pay and allowances for the suspension period.

The Court noted that the expression “honourable acquittal” was not defined under the Life Insurance Corporation of India (Staff) Rules, 1960. It was also not used in the Code of Criminal Procedure, 1973 or the Bharatiya Nagarik Suraksha Sanhita, 2023.

The Bench noted: “This Court carefully examined both clauses (a) and (b) of Rule 38 along with other provisions of the Rules of 1960 and finds that although, the term 'Honourably acquitted' has been used in clause (a), yet it is a matter of fact that the term 'Honourable acquittal' has nowhere been defined in the Rules of 1960. Similarly, the aforesaid expression 'Honourable acquittal' has nowhere been used in Cr.P.C. and BNSS.”

The Court referred to Deputy Inspector General of Police v. S. Samuthiram (2013), where the Supreme Court observed that expressions such as “honourable acquittal”, “acquitted of blame” and “fully exonerated” were unknown to criminal statutes and had developed through judicial decisions.

The Bench also relied on Shri Sanjay v. Life Insurance Corporation of India (2023), where the Bombay High Court held that an acquittal after a full trial and consideration of the prosecution evidence could not be denied the character of an honourable acquittal merely because the criminal court used the expression “benefit of doubt”.

The Court observed that the present petitioner had faced a full trial and had not been acquitted on a purely technical ground. His presumption of innocence, therefore, stood restored upon acquittal.

The Court further compared the employee’s position with that of a convicted employee granted probation under Sections 3 or 4 of the Probation of Offenders Act, 1958. It observed that Section 12 protects such a person from disqualification attached to the conviction.

The Bench found it anomalous to deny service benefits to an employee who had been acquitted while protecting the service benefits of a person whose conviction remained intact but who had received probation.

The Court consequently held that, for granting benefits under the applicable LIC rules in the circumstances of the case, there was no legally sustainable distinction between an “honourable acquittal” and an acquittal expressed as based on the benefit of doubt.

Conclusion

The Rajasthan High Court allowed the writ petition and set aside the disciplinary and appellate orders denying the petitioner full benefits for the suspension period. It restored the earlier order granting benefits under Rule 38(a) of the Life Insurance Corporation of India (Staff) Rules, 1960.

The Court directed that the entire suspension period be treated as time spent on duty for all purposes. The petitioner was held entitled to full pay, allowances and all consequential benefits.

The Life Insurance Corporation of India was directed to comply with the judgment within 60 days of receiving its certified copy.

Cause Title: Ram Pal Meena v. Life Insurance Corporation of India & Ors. (Neutral Citation: 2026:RJ-JP:39143)

Appearances

Petitioner: Advocates Rajendra Rathore, Chandra Vikram Singh and Lokesh Dholpuria

Respondents: Advocate Puneet

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