Union Of India vs Madhusudan Prasad

The Supreme Court held that under Fundamental Rule 54, the authority has discretion to determine pay and allowances for a government servant reinstated after dismissal. The Court affirmed the appellate authority's decision that the respondent, Madhusudan Prasad, was entitled to salary for the period of absence from 7.11.1994 to 15.2.1996, as he was not afforded a reasonable opportunity or a proper inquiry prior to dismissal. The Court dismissed the Union of India's appeal, upholding the High Court's order for salary payment.