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PETITIONER: KULWANT SINGH GILL

       Vs.

RESPONDENT: STATE OF PUNJAB

DATE OF JUDGMENT13/09/1990

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. KANIA, M.H. SAIKIA, K.N. (J)

CITATION:  1990 SCR  Supl. (1) 426  1991 SCC  Supl.  (1) 504  JT 1990 (4)    70        1990 SCALE  (2)597

ACT:     Civil  Services: Punjab Civil Services  (Punishment  and Appeal)  Rules, 1970: Rules 5(iv), 5(v), 8 and  9--Penalties --Withholding of increments with cumulative  effect--Whether amounts to major penalty --Procedure to be followed in  such cases.

HEADNOTE:     The  appellant,  while working as  Inspector,  Food  and Supplies, was found to have purchased sub-standard wheat and hence chargesheeted for misconduct. He submitted his  expla- nation.  Though  Rules  8 and 9  of  Punjab  Civil  Services (Punishment  and Appeal) Rules, 1970 envisage the  procedure to conduct an enquiry into the misconduct, the  disciplinary authority,  only on considering the explanation, found  that that the appellant committed a minor misconduct.  According- ly, an order was passed for stoppage of two increments  with cumulative  effect. Appellant filed a suit  for  declaration that the said order imposed a major penalty which was  ille- gal  in the absence of an enquiry under Rules 8 and  9.  The Trial Court granted a decree invalidating the said order.     On  appeal,  the District Court  confirmed  the  decree. However,  on  second appeal, the High Court  held  that  the penalty  imposed was a minor penalty within the  meaning  of Rules 5(iv) of the Rules obviating the need to make  regular enquiry. Aggrieved, the appellant has preferred this appeal, by special leave. Allowing the appeal,     HELD:  1. Withholding of increments of  pay  simpliciter without any hedge over it certainly comes within the meaning of  Rule 5(iv) of the Punjab Civil Services (Punishment  and Appeal) Rules. But when penalty was imposed withholding  two increments  i.e.  for two years with cumulative  effect,  it would  indisputably mean that the two increments  earned  by the employee was cut off as a measure of penalty for ever in his  upward march of earning higher scale of pay.  In  other words  the clock is put back to a lower stage in  the  time- scale  of  pay and on expiry of two years the  clock  starts working from that stage afresh. The insi- 427 dious effect of the impugned order by necessary implication,

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is that the appellant-employee is reduced in his  time-scale by two places and it is in perpetuity during the rest of the tenure  of  his  service with a direction  that  two  years’ increments would not be counted in his time-scale of pay  as a measure of penalty.     2. Rule 5(iv) does not empower the disciplinary authori- ty  to impose penalty of withholding increments of pay  with cumulative effect except after holding inquiry and following the  prescribed procedure. Then the order would  be  without jurisdiction  or  authority of law, and it would be  per  se void.  Considering from this angle the impugned order  would come  within the meaning of Rule 5(v) of the Rules, and  the imposition of major penalty without enquiry is per se  ille- gal.     Sarwan Singh v. State of Punjab & Ors., ILR 1985 2 P & H 193, overruled.     3.  Rules 8 and 9 admittedly envisage, on denial of  the charge  by  the delinquent officer, to  conduct  an  enquiry giving  reasonable opportunity to the presenting officer  as well  as the delinquent officer to lead evidence in  support of  the  charge  and in rebuttal  thereof,  giving  adequate opportunity  to the delinquent officer to cross-examine  the witnesses produced by the Department and to examine witness- es  if  intended  on his behalf and to  place  his  version; consideration thereof by the enquiry officer, if the  disci- plinary  authority  himself is not the  enquiry  officer.  A report of the enquiry in that behalf is to be placed  before the disciplinary authority who then would consider it in the manner  prescribed and pass an appropriate order as per  the procedure in vogue under the Rules. The gamut of this proce- dure  was not gone through. Therefore, the issuance  of  the notice and consideration of the explanations not a procedure in accordance with Rules 8 and 9.     4. The Trial Court rightly granted the decree, and it is restored.  The judgment and the decree of the High Court  is vitiated  by manifest illegality and is set aside.  At  this distance  of time it is not expedient to direct  an  enquiry under Rules 8 and 9 of the Rules.

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No  2960  of 1987.     From  the  Judgment and Order dated 18.2.  1986  of  the Punjab & Haryana High Court in R.S.A. No. 3204 of 1984. 428 0 K. Khuller and R .C. Kohli for the Appellant. C.M. Nayar for the Respondent. The Judgment of the Court was delivered by     K. RAMASWAMY. J. This appeal by special leave is against the  judgment and decree dated February 18, 1986  in  Second Appeal  No. 3204 of 1984 of Punjab & Haryana High  Court  at Chandigarh.  The  appellant/plaintiff while was  working  as Inspector.  Food and Supplies at Algaon. the Director.  Food and Supplies. Punjab on June 10. 1976 visited the place  and found  him to have purchased sub-standard wheat landing  him in receiving a charge sheet on June 29. 1976 for his miscon- duct.  The appellant had submitted his explanation. Rules  8 and  9 of the Punjab Civil Services (Punishment and  Appeal) Rules. 1970 for short ’the Rules’ envisage the procedure  to conduct an enquiry into the misconduct. But the disciplinary authority.  on consideration of the explanation  found  that the  appellant committed a minor misconduct. Accordingly  by order  dated April 12. 1977 directed stoppage of two  incre-

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ments  with cumulative effect. The appellant laid  the  suit for a declaration that the offending order amounts to  major penalty and imposition thereof without conducting enquiry as enjoined  under Rules 8 and 9 is illegal. On contest by  the respondent  state,  the trial court held that  the  impugned order amounts to major penalty and granted a decree  invali- dating  the order. On appeal, though the Distt.  Court  con- firmed,  on further Second Appeal the High Court held it  to be  minor  penalty within the meaning of Rule 5(iv)  of  the Rules obviating the need to make regular enquiry.  Assailing the legality thereof this appeal has been filed.     The  only question that needs decision is whether  stop- page  of  two increments with cumulative effect is  a  major penalty’?  Admittedly Rules 8 and 9 envisage  conducting  an enquiry  into misconduct after giving an opportunity to  the delinquent employee in the manner prescribed therein and  on establishing the charge to pass an appropriate order  impos- ing a major penalty prescribed in either clauses V to IX  or minor penalty under clauses I to IV of Rule 5 of the  Rules. If  it is a minor penalty indisputably the need  to  conduct regular  enquiry has been dispensed with. Rule 5  prescribes the penalties thus: "5.  Penalties:--The following penalties may, for  good  and sufficient reasons. and as hereinafter provided. be  imposed on a Government employee. namely: 429 Minor Penalties (i) Censure; (ii) withholding of his promotions; (iii)  recovery  from his pay of the whole or  part  of  any pecuniary loss caused by him to the Government by negligence of breach of orders; (iv) withholding of increments of pay; Major Penalties (v) reduction to a lower stage in the time-scale of pay  for a specified period, with further directions as to whether or not  the  Government employee will earn  increments  of  pay during  the  period  of such reduction and  whether  on  the expiry  of such period, the reduction will or will not  have the effect of postponing the future increments of his pay; (vi) reduction to a lower time-scale of pay, grade, post  or service which shall ordinarily be a bar to the promotion  of the  Government  employee to the time-scale of  pay,  grade, post  or service from which he was reduced, with or  without further  directions regarding conditions of  restoration  to the  grade  or  post or service from  which  the  Government employee  was  reduced  and his seniority and  pay  on  such restoration that grade, post or service; (vii) compulsory retirement; (viii)  removal from service which shall be a  disqualifica- tion for future employment under the Government; (ix)  dismissal  from service which shall  ordinarily  be  a disqualification  for  future employment under  the  Govern- ment’. Clauses VI to IX are not relevant to the facts of the case.     Withholding of increments of pay simpliciter undoubtedly is  a  minor penalty within the meaning of Rule  5(iv).  But sub-rule  (v) postulates reduction to a lower stage  in  the time-scale of pay for a specified 430 period  with  further directions as to whether  or  not  the Government employee shall earn increments of pay during  the period of such reductions and whether on the expiry of  such period  the  reduction will or will not have the  effect  of postponing the future increments of his pay. It is an  inde-

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pendent  head of penalty and it could be imposed as  punish- ment in an appropriate case.     It is one of the major penalties. The impugned order  of stoppage  of two increments with cumulative  effect  whether would  fall within the meaning of Rule 5(v)? If it so  fails Rules  8  and 9 of the Rules require conducting  of  regular enquiry.  The contention of Shri Nayar, learned counsel  for the State is that withholding two increments with cumulative effect  is  only a minor penalty as it does  not  amount  to reduction to a lower stage in the time-scale of pay. We find it extremely difficult to countenance the contention.  With- holding  of increments of pay simpliciter without any  hedge over it certainly comes within the meaning of Rule 5(iv)  of the  Rules.  But when penalty was  imposed  withholding  two increments  i.e.  for two years with cumulative  effect,  it would  indisputably mean that the two increments  earned  by the employee was cut off as a measure of penalty for ever in his  upward march of earning higher scale of pay.  In  other words  the clock is put back to a lower stage in  the  time- scale  of  pay and on expiry of two years the  clock  starts working from that stage afresh. The insidious effect of  the impugned order, by necessary implication, is that the appel- lant employee is reduced in his time-scale by two places and it  is  in perpetuity during the rest of the tenure  of  his service  with a direction that two years’  increments  would not  be  counted in his time-scale of pay as  a  measure  of penalty.  The  words are the skin to the language  which  if pealed  off its true colour or its resultant  effects  would become  apparent. When we broach the problem from this  per- spective  the effect is as envisaged under Rule 5(v) of  the Rules.  It  is undoubted that the Division Bench  in  Sarwan Singh  v. State of Punjab & Ors., I.L.R. 1985 2 P & H.  193, P.C.  Jain,  A.C.J. speaking for the division  bench,  while considering  similar question, in paragraph 8 held that  the stoppage of increments with cumulative effect, by no stretch of imagination falls within clause (v) of Rule 5 or in  rule 4.12  of  Punjab Civil Services Rules. It was  further  held that under clause (v) of Rule 5 there has to be a  reduction to  a lower stage in the time-scale of pay by the  competent authority  as a measure of penalty and the period for  which such a reduction is to be effective has to be stated and  on restoration  it  has  further to be  specified  whether  the reduction shall operate to postpone the future increments of his pay. In such cases withholding of the increments without cumulative effect does not at all arise. In case 431 where the increments are withhold with or without cumulative effect  the Government employee is never reduced to a  lower stage  of  time scale of pay. Accordingly it was  held  that clause  (iv)  of Rule 5 is applicable to the facts  of  that case.  With  respect we are unable to agree  with  the  High Court. If the literal interpretation is adopted the  learned Judges may be right to arrive at that conclusion. But if the effect  is kept at the back of the mind, it would always  be so, the result will be the conclusion as we have arrived at. If  the reasoning of the High Court is given acceptance,  it would  empower the disciplinary authority to  impose,  under the garb of stoppage of increments, of earning future incre- ments  in  the time scale of pay even permanently  with  ex- pressly stating so. This preposterous consequences cannot be permitted  to be permeated. Rule 5(IV) does not empower  the disciplinary  authority  to impose  penalty  of  withholding increments of pay with cumulative effect except after  hold- ing inquiry and following the prescribed procedure. Then the order would be without jurisdiction or authority of law, and

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it would be per se void. considering from this angle we have no  hesitation  to hold that the impugned order  would  come within the meaning of Rule 5(v) of the Rules; it is a  major penalty  and  imposition  of the  impugned  penalty  without enquiry is per se illegal.     The further contention of Shri Nayar that the  procedure under  Rule  8 was followed by issuance of  the  show  cause notice  and  consideration of the explanation given  by  the appellant would meet the test of Rules 8 and 9 of the  Rules is  devoid of any substance. Conducting an enquiry,  dehorse the  rules  is no enquiry in the eye of law.  It  cannot  be countenanced that the pretence of an enquiry without reason- able  opportunity of adducing evidence both by the Dept.  as well  as  by  the appellant  in  rebuttal,  examination  and cross-examination  of the witnesses, if examined, to  be  an enquiry  within the meaning of Rules 8 and 9 of  the  Rules. Those rules admittedly envisage, on denial of the charge  by the delinquent officer, to conduct an enquiry giving reason- able  opportunity to the presenting officer as well  as  the delinquent officer to lead evidence in support of the charge and in rebuttal thereof, giving adequate opportunity to  the delinquent officer to crossexamine the witnesses produced by the Dept. and to examine witnesses if intended on his behalf and  to  place  his version; consideration  thereof  by  the enquiry  officer, if the disciplinary authority  himself  is not  the  enquiry officer. A report of the enquiry  in  that behalf is to be placed before the disciplinary authority who then would consider it in the manner prescribed and pass  an appropriate  order as per the procedure in vogue  under  the Rules.  The  gamut of this procedure was not  gone  through. Therefore,  the issuance of the notice and consideration  of the 432 explanation  is not a procedure in accordance with  Rules  8 and  9. Obviously, the disciplinary authority felt that  the enquiry into minor penalty is not necessary and adhering  to the  principles  of natural justice issued  the  show  cause notice  and  on  receipt of the reply  from  the  delinquent officer passed the impugned order imposing penalty  thinking it  to  be a minor penalty. If it is considered,  as  stated earlier,  that it would be only a minor penalty, the  proce- dure followed certainly meets the test of the principles  of natural justice and it would be a sufficient compliance with the  procedure.  In view of the finding  that  the  impugned order  is a major penalty certainly then a  regular  enquiry has got to be conducted and so the impugned order is clearly illegal.  The  Trial Court rightly granted the  decree.  The judgment  and  the decree of the High Court is  vitiated  by manifest  illegality.  At this distance of time  it  is  not expedient  to direct an enquiry under rules 8 and 9  of  the Rules.  The appeal is accordingly allowed and  the  judgment and  decree of the High Court is set aside and that  of  the trial  court  is restored but in the  circumstances  without costs. G.N.                                 Appeal allowed. 433