SERVICE LAWS Page |1

UNIVERSITY INSTITUTE OF LEGAL STUDIES,

PANJAB UNIVERSITY, CHANDIGARH

In the partial fulfilment of requirement for syllabus of BCOM LLB (hons) in the
Subject of

SERVICE LAWS
Project Report

ON

“SUSPENSION AND SUBSISTENCE

ALLOWANCE”

Submitted to Submitted by:

Ms. Mahima Sanjana

UILS, PU Section- F

Chandigarh Roll No. – 327/20, Sem-10th

BCOM LLB (Hons)

UILS, PU, CHD

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ACKNOWLEDGEMENT

The success and the outcome of this project required a lot of guidance and assistance from
many people, and I am extremely fortunate to have got this all along the completion of my
project report. Whatever I have done is only due to such guidance and I would never forget to
thank them.

I take this opportunity to record a deep sense of gratitude to my teacher, Ms Mahima,

University Institute of Legal Studies, Chandigarh, for her unmatched guidance, valuable
suggestions and efforts made during preparation of this project on topic

SUSPENSION AND SUBSISTENCE ALLOWANCE

I owe my regards to the entire faculty of the Department of Legal Studies for helping in the
entire duration of this project.

Sanjana

10th Semester

Section-F

327/20
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INDEX

1) Table of Content …………………………………………………………………………3

2) Introduction…………………………………………………………………………….4-5
3) Suspension …………………………………………………………………………...6-14
 Object
 Authority competent
 When suspension resorted to
 Consideration to be consideration
 Deemed Suspension
 Effect of Suspension
 Duration of suspension
 Review of Suspension
 Conclusion of proceedings
4) Subsistence allowance ……………………………………………………………...15-17
 Payment of allowance
5) Conclusion………………………………………………………………………………18
6) Bibliography …………………………………………………………………………....19
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A. INTRODUCTION

In the realm of service laws, the concepts of suspension and subsistence allowance play a
critical role in regulating employer-employee relationships, particularly in cases where
disciplinary proceedings are initiated against an employee.

Suspension is an administrative action refers to a temporary cessation of duties, wherein the

employee is prohibited from discharging official functions pending an inquiry or
investigation. It is a preventive measure, not a punishment, aimed at ensuring that the inquiry
is conducted without interference or prejudice.

During the period of suspension, the employee is not entitled to receive full salary but is
granted a subsistence allowance, which is a reduced remuneration provided to mitigate
financial hardship. The quantum and conditions of subsistence allowance are governed by
statutory provisions, service rules, and judicial precedents. The payment of subsistence
allowance ensures that the suspended employee can sustain a basic livelihood while awaiting
the outcome of the disciplinary proceedings.

Judicial pronouncements have emphasized that prolonged suspension without reasonable

justification is arbitrary and violative of the principles of natural justice. Additionally, non-
payment or inadequate payment of subsistence allowance has been held to vitiate disciplinary
proceedings, as it hampers the employee’s ability to defend themselves effectively.

These concepts are governed by specific rules under service laws, such as the Central Civil
Services (Classification, Control and Appeal) Rules, and are designed to uphold the principles
of justice, efficiency, and transparency in the administration of public services. Both
suspension and subsistence allowance reflect the delicate equilibrium between safeguarding
public interest and protecting the rights of employees under due process.
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B. SUSPENSION

Suspension has been described as state of being temporarily debarred from a function or
privilege; temporary deprivation of one's office or position. Order of suspension is not a rule
but it is an exception. Suspension order is passed not in petty offences but it is passed in very
rare to rare cases. Suspension order always attracts a social stigma.

The suspended Government servant continues to remain bound to follow the lawful directions
of his superiors during the period of suspension. He continues to be subject to the same
discipline and penalties and the Conduct Rules continue to apply to him.

During suspension he cannot engage himself in any other employment, business, profession,
or vocation. The suspended official retains a lien in the permanent post held by him at the
time of suspension. He does not draw his salary during suspension as he does not perform the
duty, but he is paid subsistence allowance.

B.1 OBJECT OF SUSPENSION

The employee is suspended, where having regard to the nature of charges against him, it is
felt that it would be unsafe to continue to vest in him the powers of his post. Suspension is
also ordered as a deterrent to exhibit the firm determination of the Government to root out
corruption or other grave misconduct. It is an administrative and not a quasi-judicial action.

The object of placing an employee under suspension is to keep him away from a position
where he can interfere with the conduct of enquiry or may tamper with documentary or oral
evidence in any manner and to ensure smooth disposal of the proceedings initiated against
him.

The principles of natural justice, therefore, are not applicable to an order of suspension. The
employee is interrupted in the exercise of his functions or his enjoyment of the privilege and
excluded, during the period, from his functions or privileges. The purpose, therefore, is to
safeguard against the government servant interfering with and hampering the investigation
and tampering with material evidence1.
1
K.C Azad v. State of H.P. 1991(3) SLR 326
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B.2 AUTHORITY COMPETENT TO SUSPEND

Prior to issuing a suspension order for a government employee, the authority intending to
issue the order must ensure that he is competent to issue the order. An order made without
jurisdiction is void ab initio and illegal.

It has been held that power to suspend is quasi-judicial power and it cannot be delegated.
Even a subsequent approval of the order of suspension does not make the order valid. Where
it is not expressly laid down in the Rules as to which authority can suspend, the appointing
authority or a superior authority, can suspend the government servant.

In case an employee is on deputation to another department under the control of the

Government, he can be suspended by that department. It is of the essence of fair and
objective administration of law that the authority, vested with statutory power, should
exercise that power unfettered by any extraneous direction or influence.

Rule 10(1) of the C.C.A. (C.C.S.) Rules, 1965 provides that the following are the authorities
competent to place a government servant under suspension-

a) the Appointing Authority;

b) any Authority to which the Appointing Authority is subordinate;
c) the Disciplinary Authority;
d) any other Authority, empowered in that behalf, by the President of India, by general or
special order.

Under proviso to Rule 10(1), if an order of suspension is made by an authority lower than the
Appointing Authority; such Authority should report to the Appointing Authority the
circumstances in which the order was made. (except in case of an order of suspension made
by the Comptroller and Auditor - General in regard to a member of the Indian Audit and
Accounts Service and in regard to an Assistant Accountant General or equivalent (other than
a regular member of the Indian Audit and Accounts Service)

In Kailash Bholanath Dhengre v. Education Officer, Zilla Parishad 2, the real authority to
suspend an employee vested in the management. The Management, by its resolution directed
the initiation of departmental enquiry against the petitioner, and by its letter directed the

2
Kailash Bholanath Dhengre v. Education Officer, Zilla Parishad 2011, (8) BOM HC
 SERVICE LAWS Page |7

Headmaster to place the petitioner under suspension. The Bombay high court upheld the
order of suspension of the petitioner issued by the headmaster.

B.3 WHEN SUSPENSION IS RESORTED TO

Every employer has right to suspend his employee and such power to suspend is a
discretionary power, however, it should be exercised after due application of mind. There
should be sufficient material to justify the suspension, the order of suspension should be free
from mala fides or extraneous considerations.

A government servant can be placed under suspension only by a specific order made in
writing by the competent authority. He should not be placed under suspension by an oral
order3. It is not necessary to initiate any sort of preliminary enquiry before passing in order of
suspension. Nor any notice need be afforded to the government servant to explain the
circumstances on the basis of which he is sought to be suspended.

The provisions regarding suspension are contained in almost all Rules relating to various
services. Depending on the Rule, in this regard, a government servant may be placed under
suspension in the following circumstances-

a) When a disciplinary-proceedings against him is contemplated or is pending or

b) When a case against him in respect of any criminal offence is under investigation, inquiry
or trial or when a criminal prosecution is pending against him;
c) When he is under detention or
d) Leave he is engaged in any activity prejudicial to the security of State
e) When following a preliminary enquiry, the competent authority is satisfied that a prima
facie case has been made out for departmental proceedings. However, framing of definite
charges or communication thereof to the concerned employee or the issue of a charge-
sheet, is not a condition precedent"

Unless the rules provide, no order of suspension can be passed until and unless the
departmental proceedings are actually commenced. Again, an order of suspension against a
government servant, made without stating that it is a prelude to the institution of disciplinary
proceeding, cannot be made unless authorised by the rules.
3
Rule 10(1) CCA Rules, 1965
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In, Kalipada Ghosh v. State of W.B.4, the question before the Calcutta Court was, whether an
employee, entangled in a criminal case, arrested and detained in custody but enlarged on bail,
could be continued be under suspension. The Court held that where disciplinary proceedings
had already been started, the employee released on bail, could not claim that his suspension
be revoked. Thus, even on release of an Employee from custody, the employee could be
suspended or that when already under suspension, could be continued under suspension.
When the rules provide that a government servant can be suspended pending investigation,
inquiry or trial in connection with a criminal charge alleged against him, an order of
suspension can be passed on registration of a criminal case with the lodging of First
Information Report.

B.4 CIRCUMSTANCES TO BE CONSIDERED BEFORE

PASSING A SUSPENSION ORDER

While public interest is the guiding factor in deciding to place the government servant under
suspension, the competent authority must take into consideration all facts and circumstances
of the case. The power to suspend, therefore, should be used sparingly and with due care and
only when it is absolutely essential.

An order of suspension should not be made in a perfunctory or in a routine or casual manner.

It must not be made in petty offences unrelated to morality or the official duties of the
government servant.

Before making an order of suspension, the competent authority may take into consideration
the following circumstances

a) Whether the continuance in service of the government servant is likely to prejudice the
investigation, trial or inquiry:
b) Whether his continuance in office is likely to seriously subvert discipline in the office;
c) Where it is necessary to demonstrate the policy of the Government to deal with officers
involved in public scandals, particularly corruption;

4
Kalipada Ghosh vs The State Of West Bengal & Ors on 11 January, 2011
 SERVICE LAWS Page |9

d) Where a preliminary enquiry warrants the institution of a criminal or departmental

proceeding against the government servant.

The competent authority should consider, whether the purpose cannot be served by
transferring the employee or by granting him leave due to him.

B.5 DEEMED OR AUTOMATIC SUSPENSION

Ordinarily, a specific order is to be issued to place a government servant under suspension.

However, Rule 10 (2) of Central Civil Services (Classification, Control and Appeal) Rules,
provide that a government servant shall be deemed to be under suspension in the following
cases-

a) If a government employee is detained in custody for more than 48 hours, they are
considered under suspension from the date of detention.

b) If convicted and sentenced to imprisonment for more than 48 hours, they are
considered under suspension from the conviction date unless dismissed, removed, or
retired.

c) The 48-hour period includes any interruptions in imprisonment.

d) If a Dismissal Is Overturned: Where a penalty of dismissal, removal or compulsory

retirement from service imposed upon a Government servant under suspension is set
aside in appeal or on review under these rules and the case is remitted for further
inquiry or action or with any other directions, the order of his suspension shall be
deemed to have continued in force on and from the date of the original order of
dismissal, removal or compulsory retirement and shall remain in force until further
orders. [Rule10(3)]

e) If a Court Sets Aside a Dismissal: Where a penalty of dismissal, removal or

compulsory retirement from service imposed upon a Government servant is set aside
or declared or rendered void in consequence of or by a decision of a Court and the
disciplinary authority, on a consideration of the circumstances of the case, decides to
hold a further inquiry against him on the allegations on which the penalty was
 SERVICE LAWS P a g e | 10

originally imposed, the Government servant shall be deemed to have been placed
under suspension by the Appointing Authority from the date of the original order of
dismissal, removal or compulsory retirement and shall continue to remain under
suspension until further orders
However, no such further inquiry shall be ordered unless it is intended to meet a
situation where the Court has passed an order purely on technical grounds without
going into the merits of the case. [Rule10(4)]

In the case of Hari Shanker Dwivedi v. Board of Revenue through its Secretary and Anr 5., a
Division Bench of this Court (Lucknow Bench) expressed the view that a Government
servant detained in custody for a period of 48 hours will be treated to have been placed under
suspension by an order passed by appointing authority although in fact such an order was not
passed. Such suspension will not lapse on his being released from detention. He will be
deemed to be under continued suspension.

B.6 EFFECT OF SUSPENSION

 When an employee is suspended, relationship between master and servant continues to be

in existence. Suspended employee is subjected to same discipline as subjected before
suspension order. Suspended employee is attached with social stigma which cannot be
easily washed away and which remains throughout life. During suspension he cannot
engage himself in any other employment, business, profession, or vocation unless he
obtained permission from government.
 Suspended employee gets subsistence allowance which is half the average salary (also
gets dearness allowance (DA), compensatory (city) allowance, and house rent allowance).
 If an application is filed by Government servant involved in disciplinary proceedings for
forwarding and releasing for any assignment, scholarship, fellowship, training, etc. under
an international agency or organization or a foreign Government it should not be
forwarded and released unless final determination of the case has not been arrived. Such
Government servant should also not be sent or allowed to go on deputation or Foreign
Service to posts under an authority in India

5
1963 AWC 1118 (DB) (LB)
 SERVICE LAWS P a g e | 11

 Though, not a form of penalty, suspension definitely constitutes a great hardship for the
affected servant. Apart from not being allowed to perform his duties and earn his salary,
he is paid at reduced rates. It may also cause a lasting damage to the reputation of the
government servant and its stigma is not easily washed away even though he is ultimately
exonerated. The order of suspension, therefore, affects the government servant
injuriously6.

 SAFEGUARDS UNDER ARTICLE 311

A mere suspension from service does not necessarily involve a reduction in rank and,
therefore, does not fall within Article 311(2) of the Constitution. He continues to be in the
grade held by him immediately before suspension and retains a lien on the permanent post
held by him substantively at the time of suspension.

 QUALIFYING SERVICE

Time passed by a government servant under suspension, pending inquiry, will count as
qualifying service where-

a) on the conclusion of such inquiry, he has been fully exonerated; or

b) the suspension is held to be wholly unjustified; or
c) where the order of suspension is withdrawn.

B.7 DURATION OF SUSPENSION ORDERS:

a) Rule 10(5) provides that order of suspension made or deemed to have been made under
this rule shall continue to remain in force until it is modified or revoked by the authority
competent to do so. However, this rule is Subject to the provisions contained in sub-rule
(7), which states that an order of suspension made or deemed to have been made under
sub-rule (1) or (2) of this rule shall not be valid after a period of ninety days unless it is
extended after review, for a further period before the expiry of ninety days.
For deemed suspensions under custody, the 90-day period starts after the employee’s
release or when the appointing authority is informed of the release

6
Khem chand vs Union Of India, 1963 AIR 687
 SERVICE LAWS P a g e | 12

b) Where a Government servant is suspended or is deemed to have been suspended and any
other disciplinary proceeding is commenced against him during the continuance of that
suspension, the authority competent to place him under suspension may, for reasons to be
recorded by him in writing, direct that the Government servant shall continue to be under
suspension until the termination of all or any of such proceedings.

c) An order of suspension made or deemed to have been made under this rule may at any
time be modified or revoked by the authority which made or is deemed to have made the
order or by any authority to which that authority is subordinate.

Circumstances under which suspension order be revoked

(a) Departmental Proceedings

i) If it is decided that no formal proceedings need be drawn up for imposition of any

kind of penalty;
ii) Where the final order passed is other than dismissal, removal or compulsory
retirement;
iii) Where the Government servant is exonerated of the charges against him;
iv) In appeal or revision, the order is modified into one other than dismissal, removal
or compulsory retirement and no further inquiry is ordered to be held.

(b) Criminal Offence

i) In arrest and detention cases, it is decided not to file charge-sheet in the court;
ii) If appeal/ revision against acquittal in higher court fails;
iii) If acquitted in trial court and no further appeal is preferred in higher courts against
the acquittal order.

In Sunder Das v. Union of India & Others,7 it was held that once a person is acquitted of a
criminal charge on lack of evidence, the employer has no option but to reinstate him and pay
him for the period he was under suspension.

Prolonged continuation of suspension is not justified unless the case is one of having
technicalities which require more time to dispose off. In the case of State of Himachal
Pradesh v. B. C. Thakur8, the Supreme Court upheld the order of the Tribunal quashing the
7
SLJ-1990 (1) CAT
8
1994 (27) A.T.C 567
 SERVICE LAWS P a g e | 13

suspension order, where the employee had been under suspension for three years and no
substantial progress in the disciplinary proceedings had been made

B.8 REVIEW OF SUSPENSION

Rule 10 (6) provides that an order of suspension made or deemed to have been made shall be
reviewed by the authority competent to modify or revoke the suspension, before expiry of
ninety days from the effective date of suspension, on the recommendation of the Review
Committee constituted for the purpose and pass orders either extending or revoking the
suspension. Subsequent reviews shall be made before expiry of the extended period of
suspension. Extension of suspension shall not be for a period exceeding one hundred and
eighty days at a time.

The Supreme Court in Ajay Kumar Choudhary's case has come down heavily on this type of
provisions which allow the competent authorities to extend the period of suspension for
indefinite periods after periodical reviews. In the said case, the appellant had initially been
suspended by the Suspension Order dated 30.9.2011. This suspension was extended on
28.12.2011 for a further period of 180 days. Then, with effect from 26.6.2012 the suspension
was extended for another period of 180 days. Thereafter, the third extension of his suspension
was ordered on 21.12.2012, but for a period of 90 days. It came to be followed by the fourth
suspension for yet another period of 90 days with effect from 22.3.2013. Thus, he continued
to be under suspension continuously from 30.09.2011.

The Supreme Court observed that "Suspension, specially preceding the formulation of
charges, is essentially transitory or temporary in nature, and must be of short duration. If it is
for an indeterminate period or if its renewal is not based on sound reasoning
contemporaneously available on the record, this would render it punitive in nature…
Protracted periods of suspension, repeated renewal thereof, have regrettably become the norm
and not the exception that they ought to be. The suspended person suffering the ignominy of
insinuations, the scorn of society and the derision of his Department, has to endure this
excruciation even before he is formally charged with some misdemeanour, indiscretion or
offence. His torment is his knowledge that if and when charged, it will inexorably take an
inordinate time for the inquisition or inquiry to come to its culmination, that is to determine
 SERVICE LAWS P a g e | 14

his innocence or iniquity. Much too often this has now become an accompaniment to
retirement.

B.9 CONCLUSION OF PROCEEDINGS

 Where the Competent Authority is of the opinion that the suspension was wholly
unjustified, the Government servant may be paid full pay and allowances.
 Where the Competent Authority is of the opinion that the proceedings were delayed for
reasons directly attributable to the Govt. servant, it may after notice to the Govt. servant
and considering his representation-if any, order a reduced amount to be paid.
 The period of suspension will be treated as period spent on duty for all purposes.
 Minor Penalty is imposed - Where the proceedings result only in minor penalty being
imposed, then the suspension is treated as wholly unjustified.
 Order of Suspension is appealable under Rule 23 (i) of GCS (CCA) Rules, 1965.
 SERVICE LAWS P a g e | 15

C. SUBSISTENCE ALLOWANCE

An order of suspension does not put an end to the government service. The relationship of
master and servant between the parties subsists and it does not cease. Suspension merely
suspends the claim of salary by the servant, the Service Rules provide for the payment of
subsistence allowance to the employee.

The dictionary meaning of the word 'subsist' is 'to remain alive as on food, to continue to
exist." If further highlighted that "subsistence" meant “means of supporting life, especially a
minimum livelihood.” This level of existence is one of the reasons as to why a departmental
proceeding should be concluded with diligence within a reasonable period of time. Hence,
The provision for payment of subsistence allowance is made to enable the employee to
sustain himself till the finality of his case. It is to ensure non-violation of the right to life of
the employee available under Article 21 of the Constitution.

The very nomenclature of the allowance makes it clear that the amount paid to such a
Government servant should be sufficient for bare subsistence in this world in which the prices
of the necessities of life are increasing every day on account of the conditions of inflation
obtaining in the country.

Sometimes subsistence allowance is provided for in the Rules themselves and in other cases it
is fixed by Government Instructions. Where the Rules are silent regarding subsistence
allowance, the employee is entitled to full remuneration as subsistence allowance during the
period of suspension.

Payment of subsistence allowance at the rates fixed in the Rules cannot be regarded as
deduction from wages. The employee receives less than the wages, because he is under
suspension and the Rules authorise only the payment of subsistence allowance. However, the
Rules which provide for the payment of only a nominal subsistence allowance of Re. 1 has
been held to be arbitrary and violative of Articles 14, 16, 21 and 311(2) of the Constitution.9

C.1 PAYMENT OF SUBSISTANCE ALLOWANCE

9
State of Mah v. Chanderbhan, 1983
 SERVICE LAWS P a g e | 16

F.R. 53 deals with the entitlements of a government servant under suspension or deemed to be
under suspension by an order of the competent authority. It includes following provisions

1. When a government employee is suspended, they are entitled to the following payments:

a) For Military Personnel Reverting to Civil Duty:

 They will receive the same pay and allowances they would have received if they had been
suspended while on military duty.

b) For Other Government Servants:

 They will receive subsistence allowance equal to half-pay leave salary, along with
applicable dearness allowance.
 They may also get compensatory allowances if they meet the required conditions.

2. Change in Subsistence Allowance After 3 Months:

 The authority can increase the subsistence allowance by up to 50% if the delay in
proceedings is not due to the employee. A
 The authority can reduce the subsistence allowance by up to 50% if the delay is due to the
employee.
 The rate of dearness allowance will be adjusted based on the revised subsistence amount.

3. Certificate of Non-Employment Required:

The suspended employee must certify that they are not engaged in any other job, business, or
profession to continue receiving subsistence allowance.

If an employee, who is deemed to be under suspension after dismissal, removal, or

compulsory retirement, fails to submit this certificate, they will receive the amount that is
lesser of their earnings or subsistence allowance.

Fundamental Rule 53 provides for the review of the amount of subsistence allowance within
a period of 3 months from the date of suspension. An order made, after such review, reducing
the subsistence allowance or refusing increase in the amount, without giving the employee an
opportunity to offer an explanation is held to be bad in law.

.
 SERVICE LAWS P a g e | 17

Payment of subsistence allowance in accordance with the Rules, to an employee under

suspension is not a bounty. It is a right and if a suspended employee is unable to appear for
want of funds on account of non-payment of subsistence allowance, it is a clear case of
breach of principles of natural justice....and that vitiates the departmental enquiry and the
consequent order of removal from service.

The Apex Court in State of Rajasthan v. B.K. Meena & Others, held that non-payment of
subsistence allowance is an inhuman act which has an unpropitious effect to life of an
employee. The act of non-payment of Subsistence Allowance can be linked to slow poisoning
as the employee, if not permitted to sustain himself on account of non-payment of subsistence
allowance would gradually starve himself to death.

In case of The Registrar, Cooperative Society v. M. Elango, 10it was observed that Non-
Payment Of Subsistence Allowance To An Employee During Suspension Will Be Antithetical
To Article 21. A Division Bench of the Madras High Court has emphasized that subsistence
allowance cannot be denied to employee(s) during the tenure of their suspension. It was held
that, "The underlying principle for making payment of subsistence allowance is to allow an
individual to sustain himself. In the present context of the suspension of an employee, one
has to keep in mind that services of an employee have not been snapped and the employer-
employee relationship during suspension continues to subsist

Death of Suspended Employee- Where a Govt. servant under suspension dies before the
disciplinary proceedings or the court proceedings against him are concluded, the period
between the date of suspension and the date of death shall be treated as duty for all purposes
and his family shall be paid the full pay and allowances to which he would have been entitled
had he not been suspended, for that period subject to adjustment of subsistence allowance
already paid.

E. CONCLUSION
10
The Registrar vs [Link] on 10 February, 2020
 SERVICE LAWS P a g e | 18

Concluding topic suspension in service laws requires establishing clear termination

conditions specifying when the suspension period ends, such as after disciplinary proceedings
are complete or by authority decision, alongside a formal reinstatement process with written
notifications and specified timeframes. The conclusion must address financial settlements
including calculation of arrears if suspension is reversed, treatment of the suspension period
for service continuity, and a structured reconciliation process for subsistence allowances paid
during suspension.

The provisions for concluding subsistence allowance should detail when regular salary
resumes, any transition period from allowance to full pay, and final settlement procedures.
Essential elements include documentation requirements for payments made, certification of
allowance cessation, and accounting for tax implications, all while ensuring compliance with
governing statutes, judicial precedents, and providing procedural safeguards such as appeal
mechanisms and review processes to protect employee rights.

BIBLIOGRAHY
 SERVICE LAWS P a g e | 19

BOOKS REFERRED

 Narinder Kumar, Law relating to Government Services and Management of Discipline

Proceedings (Allahabad Law Agency) Allahabad 2nd edn.2008.
 Dr. Babita Devi Pathania, Service Law(New Era Law Publications) Faridabad Haryana
2nd edn.2020.

WEBSITES REFERRED

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