KULWANT SINGH GILLversusSTATE OF PUNJAB

                                                                                .
A                        KULWANT SINGH GILL                                     t-
                                       V.
                            STATE OF PUNJAB

                            SEPTEMBER 13, 1990

B     [M.H. KANIA, K.N. SAIKIA AND K. RAMASWAMY, JJ.]

         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.
c         The appellant, while working as Inspector, Food and Supplies,
    was found to have purchased sub-standard wheat and hence charge-
    sheeted for misconduct. He submitted his explanation. 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
D   disciplinary authority, only on considering the explanation, found that
    that the appellant committed a minor misconduct. Accordingly, 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 illegal in the absence of an enquiry under
    Rules 8 and 9. The Trial Court granted a decree invalidating the said
E   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 S(iv) of the Rules obviating
    the need to make regular enquiry. Aggrieved, the appellant has prefer-
F   red 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 S(iv) of the
G   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
H   of two years the clock starts working from that stage afresh. The insi-
                                                                                 -~·
                                      426
                     K.S. GILL v. STATE OF PUNJAB                       427

dious effect of the impugned order by necessary implication, is that the       A
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 S(iv) does not empower the disciplinary authority to            B
impose penalty of withholding incremenis 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
wonld be per se void. Considering from this a11gle the impugned order
would come within the meaning of Rule S(v) of the Rules, and the impo-
sition of major penalty without enquiry is per se illegal.                     c
     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 D
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 io the delinquent officer to. cross-examine the
witnesses produced by the Department 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 E
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 nuder the Rules. The gamut of tMs procedure was not g~me
through. Therefore, the issuance of the notice and consideration of the ex-
 planation is not a procedure in accordance with Rules 8 and 9.             F

       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.
                                                                               G
      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.
                                                                               H
    428         SUPREME COURT REPORTS               [1990] Supp. I S.C.R.

A         0 K. Khuller and R.C. Kohli for the Appellant.

          C.M. Nayar for the Respondent.

          The Judgment of the Court was delivered by

B         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 mis-
c   conduct. 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.
D   Accordingly by order dated April 12, 1977 directed stoppage of two
    increments 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
E   granted a decree invalidating the order. On appeal. though the Distt.
    Court confirmed, on further Second Appeal the High Court held it to
    be minor penalty within the meaning of Rule 5(iv) of the Rules obviat-
    ing the need to make regular enquiry. Assailing the legality thereof
    this appeal has been filed.

F         The only question that needs decision is whether stoppage 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 pre-
    scribed therein and on establishing the charge to pass an appropriate
    order imposing a major penalty prescribed in either clauses V to IX or
G   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
H              on a Government employee, namely:
             K.S. GILL v. STATE OF PUNJAB [K. RAMASWAMY, J.J             429

                                       Minor Penalties
                                                                                A
                (i) Censure;

                (ii) withholding of his promotions;

                (iii) recovery from his pay of the whole or part of any         B
                pecuniary loss caus.ed by him to the Government by negli-
                gence of breach of orders;

                (iv) withholding of increments of pay;

                                       Major Penalties
                                                                                c
                (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      D
                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 prom;ition of
                the Government employee to the time-scale of pay, grade,
                post or service from which he was reduced, with or without      E
                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;                                    F

                (viii) removal from service which shall be a disqualification
                for future employment under the Government;

                (ix) dismissal from service which shall ordinarily be a dis-
                qualification for future employment under the Government'.      G

          Clauses VI to IX are not relevant to the facts of the case.

          Withholding of increments of pay simpliciter undoubtedly is a
J   minor penalty within the meaning of Rule S(iv). But sub-rule (v) postu-
    lates reduction to a lower stage in the time-scale of pay for a specified H
     430         SUPREME COURT REPORTS                [1990] Supp. 1 S.C.R.

     period with further directions as to whether or not the Government
A
     employee shall earn increments of pay during the period of such reduc-
     tions 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 1s an independent head of penalty and it could be imposed as punish-
     ment in an appropriate case.
B
            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 falls 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 cumula-
     tive effect is only a minor penalty as it does not amount to reduction to
c    a lower stage in the time-scale of pay. We find it extremely difficult to
     countenance the contention. Withholding of increments of pay siinp-
     liciter 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
D    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 appellant emp-
E    loyee 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 appa-
     rent. When we broach the problem from this perspective the effect is
F    as envisaged under Rule S(v) of the Rules. It is undoubted that the
     Division Bench in Sarwan Singh v. State of Punjab & Ors., I.LR. 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
G     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 compe-
     tent 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
Ji    increments without cumulative effect does not at all arise. In case
          K.S. GILL v. STATE OF PUNJAB [K. RAMASWAMY, J.]            43f

where the increments are withhold with or without cumulative effect
                                                                            A
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     B
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
increments in the time scale of pay even permanently with expressly
stating so. This preposterous consquences cannot be permitted to be
permeated. Rule S(IV) does not empower the disciplinary authority
to impose penalty of withholding increments of pay with cumulative          c
effect except after holding inquiry and following the prescribed proce-
dure. Then the order would be without jurisdiction or authority of law,
and 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 S(v) of the Rules; it is a major penalty and imposition     D
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 con-
sideration of the explanation given by the appellant would meet the
test of Rules 8 and 9 of the Rules is devoid of any substance. Conduct-     E
ing an enquiry, dehorse the rules is no enquiry.in the eye of law. It
cannot be countenanced that the pretence of an enquiry without
reasonable 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
Rule~ 8 and 9 of the Rules. Those rules admittedly envisage,.. on denial    F
of the charge by the delinquent officer, to conduct an enquiry giving
reasonable opportunity to the presenting officer as well as the delin-
quent 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 Dept. and to examine witnesses
if intended on his behalf and to place his version; consideration there~f   G
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     H
    432         SUPREME COURT REPORTS                [ 1990] Supp. I S.C.R.

A   explanation is not a procedure in accordance with Rules 8 and9. Obvi-
    ously, 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,
B   that it would be only a minor penalty, the procedure 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
c   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 judg-
    ment 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.