Holding

The order under FR 25 denying the appellant's crossing of the efficiency bar was invalid; the appellant is entitled to cross the efficiency bar, receive arrears of salary and pension, and interest at 12% per annum.

Summary

O.P. Gupta, an Assistant Engineer in the Central Public Works Department, was suspended in 1959 pending a departmental enquiry that lingered for over a decade. He was reinstated in 1970 but the enquiry continued, leading to his compulsory retirement in 1972. The Delhi High Court quashed the retirement, held the suspension unjustified and ordered full pay, allowances and increments. In 1982 the Director General of Works, invoking Fundamental Rule 25, declared Gupta unfit to cross the efficiency bar, a decision later challenged. The Supreme Court held that an order under FR 25 is subject to judicial review, must comply with natural‑justice requirements, and cannot be imposed after retirement without a hearing. The Court ordered that Gupta be allowed to cross the efficiency bar as per the 1967 Finance Ministry decision, to receive arrears of salary and pension, and to be paid interest at 12% per annum. The appeal was allowed and the High Court judgment set aside.

Issues considered

The validity of the order under Fundamental Rule 25 denying the appellant's crossing of the efficiency bar.
Whether the appellant is entitled to interest on delayed pension payment.
Whether prolonged suspension and departmental proceedings violate natural justice and Article 309 of the Constitution.
Whether a hearing is required before imposing a prejudicial order under FR 25.
Whether failure to pass the departmental examination under CPWD Manual r.2.636 can bar crossing of the efficiency bar after retirement.

Legislation cited

Central Civil Services (Classification, Control and Appeal) Rules, 1965s. Fundamental Rule 25, s. Fundamental Rule 54, s. Fundamental Rule 56(j), s. Rule 12
Central Civil Services (Pension) Rules, 1972s. Rule 9(2)(b)
Central Public Works Department Manuals. Rule 2.636
Constitution of Indias. Article 309
Ministry of Finance Decisions. September 21, 1967
Ministry of Home Affairs Memorandums. April 6, 1979

Subjects

efficiency barsuspensiondepartmental inquirynatural justiceArticle 309Fundamental Rule 25Fundamental Rule 54compulsory retirementinterest on pensionjudicial reviewcivil service rules

Judgment

O.P. GUPTA
A
v.
UNION OF INDIA & ORS.

SEPTEMBER 3, 1987.

[A.P. SEN AND B.C. RAY, JJ.] B

Central Civil Services (Classification, Control and Appeal) Rules,
1965, Rule 12-Departmental proceedings against Civil Servant-Not
to be protracted unnecessarily-Necessity for concluding with reason-
able diligence.
c
Civil Services: Fundamental Rules.-FRs 25 and 54: Civil
Servant-Placed under suspension-Necessity for departmental
proceedings being concluded within reasonable period-Crossing of
efficiency bar-To be considered at appropriaie time-Rules of natural D
justice applicable.

') Constitution of India, 1950: Article 309--Service rules have to be
reasonable and fair and not grossly unjust.
E
Words & Phrases: 'Ordinary'-Meaning of

Fundamental Rule 54 requires that when a Government servant
who had been dismissed, removed or suspended is reinstated, the F
authority competent to order reinstatement has to make a specific order
(a) regarding the pay and allowances to be paid to the Government
servant for the period of his absence from duty, and (b) directing
whether or not the period of suspension shall be treated as a period
spent on duty. Fundamental Rule 25 lays down that the increment next
above the efficiency bar in a time scale shall not be given to a Govern· G

I .--{
ment servant without the specific sanction of the authority empowered
to withhold increment under R.24. The Government of India, Ministry
of Finance's decision dated September 21, 1967, as clarified by Ministry
of Home Affairs, Department of Personnel & Administrative Reforms
Memorandum dated April 6, 1979, stated that if after the conclusion of
the disciplinary proceedings, the Government servant is completely H
27
28 SUPREME COURT REPORTS [1988] 1 S.C.R.

A exonerated, he may he allowed to cross the efficiency bar with effect
from the due date retrospectively, unless the competent authority
decides otherwise. Rule 2.636 of the C.P.W.D. Manual, Vol.I, 1956
edn., laid down that Divisional and Sub-Divisional Officers who fail to
pass the departmental examination should not ordinarily be considered
either for promotion or for crossing the efficiency bar.
B
The appellant, an Assistant Engineer in the Central Public Works
Department was placed under suspension on September 3, 1959 pend· ._.,,.
ing a departmental enquiry. That order was revoked by the Chief
Engineer on May 8, 1970, and he was reinstated in service on May 25,
1970 but the departmental proceedings were kept alive. Immediately
C thereafter, the appellant made a representation to the department to
pass an order under FR. 54 for payment of full pay and allowances for
the period of suspension, which was rejected on the ground that the
departmental enquiry was still pending. Thereafter, the appellant was
compulsorily retired by an order of the Chief Engineer dated April 25,
1972 under FR. 56(j).
D
In the writ petition filed by the appellant under Article 226 of the
Constitution challenging the validity of the order of compulsory retire-
ment, and seeking directions in terms of FR 54 for payment of full pay
and allowances for the period of suspension and also for payment of all
increments to which he was entitled, a Single Judge of the High Court
E found the order of compulsory retirement bad in law, quashed it, and
held that the appellant shall be deemed to have continued in service till
March 31, 1978, the date when he attained the normal age of superan·
nuation. It was further held that the suspension of the appellant was not
justified, and the period of suspension must be regarded as spent on .
duty and therefore the appellant under FR 54(2) was entitled to full pay
f and allowances and the increments for that period, and that r.9(2)(b) of
the Central Civil Services (Pension) Rules, 1972 was not attracted, and
accordingly quashed the departmental proceedings. The Division Bench
declined to interfere.

Thereafter the Director General of Works on September 17, 1982
G passed an order on the recommendation of the departmental promotion
board declaring the appellant nnfit to cross the efficiency bar at the
stage of Rs.590 in the grade Rs.350·900 with effect from October 5,
1966.

In the contempt proceedings taken by the appellant, the govern·
H men! stated that there were two conditions for an Assistant Engineer to
O.P. GUPTA v. U.0.1. 29

efficiency bar namely, (i) that he should have passed the depart- A
al examination in Accounts, and (ii) he should have obtained good
reports for the preceding live years. The Single Judge declined to in-
terfere with the governmental order. The Division Bench dismissed the
appeal and reiterated that a writ petition should be tiled.

The appellant thereupon filed the present writ petition on July 10, B
1985 under Article 226 of the Constitution to enforce his right to incre-
ments after crossing of the efficiency bar and also for grant of interest
on delayed payment of pension. The High Court held that the crossing
of the efficiency bar depends on the satisfaction of the competent
authority under FR 25 and alsQ on the passing of the departmental
examination under r. 2.636 of the C.P. W.D. Manual, Vol. 1, 1956 edn.
and that if the authority concerned had chosen not to give the sanction
c
under FR 25, the Court had no jurisdiction to interfere particularly as
the appellant was not actually in office for such a long period of time.

In this appeal by special leave, on the questions: (I) was the Union
of India justified in passing the oder in terms of FR 25 declaring the D
appellant unlit to cross the efficiency bar, and (ii) was the appellant
entitled to interest on the delayed payment of his pension?

Allowing the appeal,

HELD: 1.1 The order passed by the competent authority under E
FR 25, prejudicial to the interest of the appellant must be subject to the
power of judicial review. [44AB]

1.2 The stoppage of increment at the efficiency bar during the
pendency of a departmental proceeding is not by way of punishment,
and therefore the government servant facing a departmental inquiry is F
not entitled to a hearing. The court does not come into the picture at
that stage. But where despite the fact that the departmental inquiry
against the government officer had been quashed, and it had been held
by the High Court that the suspension was wholly without justification,
there was no occasion for the competent authority to enforce the bar
against him under FR 25, particularly after his retirement, unless it was G
by way of punishment. [43G·44A]

1.3 It is a fundamental rule of law that no decision must be taken
which will affect the rights of any person without first giving him an
opportunity of putting forward his case. Strict adherence to this rule is
mandatory where a public authority or body has to deal with rights. H
30 SUPREME COURT REPORTS [ 1988] 1 S.C.R.

A There is always the duty to act judicially in such cases. There is, there-
fore, the insistence upon the requirement of a fair hearing. There is no
- reason why the power of the Government under FR 25 should not be
subject to the same limitations. [41G, 42B,C]

1.4 The note beneath Government of India, Ministry of Finance
B Memorandum dated April 23, 1962, as amended from time to time
enjoins that the cases of government servants for crossing of the effi-
ciency bar in the time-scale of pay should be considered at the ap-
propriate time and in case the decision is to enforce the bar against the
gove:.nment servant, he should be informed of the decision. In enforc-
ing the bar under FR 25 against the appellant the competent authority
C acted in flagrant breach_ofthese instructions. [44FG]

1.5 There was no question of the appellant having adverse record
for five years preceding his compulsory retirement since for three years
he was under suspension and forthe next two years there was nothing
blameworthy against him. Furthermore, he having compulsorily
D retired on July 28, 1972 and also having reached his normal age of
superannuation on March 31, 1978, his failure to pass the departmental
examination under r. 2.636 could not be treated as a ground for denying
him the benefit of crossing the efficiency bar :under FR 25. The word
'ordinary' in r. 2.636 must be given its plain meaning as in normal
·circumstances. [44CE]
E
2.1 Suspension where there is no question of inflicting any
departmental punishment -prima facie tantamounts to imposition of
penalty which is manifestly repugnant to the principles of -natural
justice and fairplay in action. ·The conditions of service are within the
executive power of the State or its legislative power under the proviso to
F Art. 309 of the Constitution, but even so such roles have to be reason-
able and fair and not grossly unjust. It is a clear principle of natural
justice that the delinquent officer when placed under suspension is
entitled to represent that the d:partmental proceedings should be con-
cluded with reasonable diligence and within a reasonable period of
time. If such a principle were not recognised, it would imply that the
G executive is being vested with a totally arbitrary and unfettered power
of placing its officers under disability and distress for an indefinite
duration. [41DF]

2.2 There is no presumption that the Government always acts in a
manner which is just and fair. In the instant ease, there was no occasion
H whatever to protract the departmental inquiry for a period of 20 years
O.P. GUPTA v. U.0.1. 31

• and keeping the appellant under suspension for a period of 11 years
r1 unless it was actuated with the mala fide intention of subjecting him to A
harassment. [40F]

2.3 The public interest in maintaining the efficiency of the
services requires that civil servants should not be unfairly dealt with.
The Government must view with concern that a departmental inquiry B
against the civil servant should have been kept alive for so long as 20
years or more and that he should have been placed under suspension
-r without any lawful justification for as many as 11 years, without any

... progress being made in the departmental inquiry. It should also view
with concern that a decision should have been taken by the competent
authority to enforce the bar under FR 25 against the civil servant long
after his retirement without affording him an opportunity of a hearing c
)- with a view to cause him financial loss. [45AB]
/

\.
3. The Court, as a settled practice has been making direction for
payment of interest at 12% on delayed payment of pension. There is no
reason for it to depart from that practice in the facts of the present case. [45E] D

4. The Director General of Works is directed to make an order in
terms of FR 25 allowing the appellant to cross the efficiency bar accord-
Ing to the decision of the Government of India, Ministry of Finance
dated September 21, 1967 as later clarified by the Ministry of Home
-~ Affairs Memorandum dated April 6, 1979 and to re-fix his pension E
accordingly. The appellant would be entitled to interest at 12% per
annnm on the difference in salary as well as in pension. [45G-46A]

Ridge v. Baldwin, LR [1964] AC40; M. Gopala Krishna Naidu v.
State of Madhya Pradesh, [1968] 1 SCR 355; B.D. Gupta v. State of
Haryana, (1973] 2 SCR 323; Khem Chand v. Union of India, [1958] F
SCR 1080 and Board of Trustees of the Port of Bombay v.Di/ip Kumar
·' -!.-
Raghavendranath Nadkarni & Ors., [1983] 1SCR328, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3582
of 1986.
G
From the Judgment and Order dated 24.7.1985 of the Delhi High
Court in Civil W.P. No. 435 of 1985.

. -{ S. Rangarajan and Ms. Asha Rani Jain for the Appellant.

V.C. Mahajan, Ms. C.K. Sucharita and C.V. Sobba Rao for the H
Respondents.
32 SUPREME COURT REPORTS [1988) 1 S.C.R.

A The Judgment of the Court was delivered by
~

SEN, J. This appeal by special leave directed against the judg-
ment and order of the High Court of Delhi dated July 24, 1985 raises
two questions, namely: ( 1) Was the Union of India justified in passing
an order dated September 17, 1982 in terms of FR 25 declaring the
B appellant to be unfit to cross the efficiency bar as Assistant Engineer,
Central Public Works Department at the stage of Rs.590 in the pre-
revised scale of pay of Rs.350-590-EB-900 as from October 5, 1966?
---·1-
And (2) Is the appellant entitled to interest on the delayed payment of
his pension?

c was asThis litigation has had a chequered career. The appellant who
Assistant Engineer in the Central Public Works Department
-
was placed under suspension pending a departmental enquiry under
r. 12(2) of the Central Civil Services (Classification, Control &
}
Appeal) Rules, 1965 on September 3, 1959. He remained on suspen-
sion till May 25, 1970 when on repeated representations the Chief
D Engineer, Central Public Works Department revoked the order of
suspension and he was reinstated in service. During the aforesaid
period of suspension, adverse remarks in his confidential reports for
the period between April 1, 1957 and August 31, 1957 and between
April 1, 1958 and March 31, 1959 were communicated to him on
December 16, 1959. After a period of nearly iive years, the depart-
E mental proceedings culminated in an order of dismissal from service >'--·
dated March 12, 1964 but the same on appeal by him, was set aside by
the President of India by order dated October 4, 1966 with a direction

F
for the holding of a fresh departmental inquiry under r. 29(1)(c) of the
Rules, with a further direction that he shall continue to remain under
suspension. The order of suspension was revoked by the Chief
Engineer on May 8, 1970 but the departmental proceedings were kept
-
alive. As a result of this, the appellant was reinstated in service on May h
25., 1970. Immediately thereafter, he made representation to the
Department to pass an order under FR 54 for payment of full pay and
allowances for the period of suspension i.e. the period between Sep-
tember 3, 1959 and May 25, 1970 but the same was rejected on the
G ground that departmental inquiry was still pending.

There was little or no progress in the departmental inquiry. On
April 25, 1972 the Chief Engineer passed an order of compulsory )- ~
retirement of the appellant under FR 56(j). The appellant made re-
presentations to various authorities, including the President of India,
H against his compulsory retirement but the same was rejected. Eventu-
0.P. GUPTA v. U.0.1. (SEN, J.] 33

ally, on July 20, 1972 the appellant filed a petition under Art. 226 of
rj' A
the Constitution in the High Court challenging the validity of the order
of compulsory retirement and prayed for a direction in terms of FR 54
for payment of full pay and allowances for the period of suspension
and also for payment of all increments to which he was entitled. He
also prayed for quashing of the departmental proceedings.
B
A learned Single Judge (Wad, J.) by his judgment and order
dated January 5, 1981 held that the order of compulsory retirement of
-f' the appellant was bad in law, not being relatable to FR 56(j) inasmuch
as the action was not based on an overall assessment of the appellant's
.cc record of service and was in breach of the instructions issued by the
Government of India, Ministry of Home Affairs dated June 23, 1969
c
)-- laying down the procedure to be followed under FR 56(j). He further
/ held that the action to compulsorily retire the appellant in 1972 under
\ FR 56(j) could not obviously be taken on the basis of adverse remarks
for the years 1950-51 when he was an Overseer, nor on the adverse
remarks for the years 1957-59 communicated to him on December 16,
1959, after a lapse of 20 years and 13 years respectively. Further he D
observed that the adverse remarks of 1957-59 were not serious enough
to cut short the career of the appellant as a Government servant,
particularly in view of the fact that the general confidential reports for
two years immediately preceding his retirement on July 28, 1972 did
not reveal anything blameworthy against him. He accordingly quashed
the order of compulsory retirement of the appellant and held that he E
shall be deemed to have continued in service till March 31, 1978, the
date when he attained the normal age of superannuation.

During the course of his judgment, the learned Judge also
adversely commented on the failure of the Department to pass an
order in terms of FR 54 consequent upon the reinstatement of the F
appellant on May 25, 1970 within a reasonable time. He observed that

' ordinarily he would have left it to the Department to pass an order
under FR 54 as to whether the suspension of the appellant for the
period from September 3, 1959 to May 25, 1970 was justified or not but
due to the inactivity or refusal on the part of the Government to pass
an order under FR 54, the Court was left with no other option but to G
deal with the question. After referring to the various stages of the
departmental proceedings, the learned Judge held that the suspension
_,_ of the appellant was not justified and the period of suspension must be
regarded as spent on duty and therefore the appellant under FR 54(2)
'"" was entitled to full pay and allowances and the increments for that
period. He further held that r. 9(2)(b) of the Central Civil Services H
34 SUPREME COURT REPORTS [1988] I S.C.R.

(Pension) Rules, 1972 was not attract<;d and accordingly quashed the
A departmental proceedings. The operative part of the judgment of the
learned Judge reads as follows:

'The petition, for the reasons stated above, succeeds. The
order of compulsory retirement dated 25.4.1972 is set
B aside. The petitioner would be entitled to continuation. in
service upto March 31, 1978 (the date when he reached his
normal age of superannuation) and consequential benefits.
The continuation of suspension of the petitioner was with-
out any justification. The petitioner would be entitled to

c
full pay and allowances from 3.9.1959 to 24.5.1970 with
increments and other service benefits according to Rules.
The pending departmental proceedings are quashed."
---
Aggrieved, the Union of India went up in appeal but a Division
Bench by its judgment dated March 24, 1982 declined to interfere. The
appellant had in the meanwhile submitted his bill of arrears and the
D respondents having failed to comply with the direction of the learned
Single Judge, he moved the High Court for contempt. In response to
the notice issued by the High Court, respondent no. 4 Director
General of Works entered appearance on September 6, 1982 and
tendered a written apology, upon which the High Court dropped the
proceedings. It appears that the Department paid the appellant about
E Rs.86,000 in compliance with the judgment of the learned Single
Judge.

Although there is a healthy trend and the Government of India
has set up an independent Ministry-Ministry of Personnel, Public
Grievances & Pension-for settlement of claims in regard to pension,
F this case is an instance where a civil servant had been subjected to
-
endless harassment for no fault of his own. While it is true that the
charge levelled against the appellant was serious enough to merit the
imposition of a major punishment, there was little or no progress for
keeping the departmental proceedings pending for over 20 years.
There was persistent effort on behalf of the Department to visit the
G appellant with civil consequences, first by placing him under suspen-
sion under r. 12(2) of the Rules for a period of 11 years and secondly
by directing his compulsory retirement when it was realised that the
charge levelled could not be substantiated. Under FR 54 when a
Government servant who had been dismissed, removed or suspended
is reinstated, the authority competent to order reinstatement has to
H make a specific order (a) regarding the pay and allowances to be paid
0.P. GUPTA v. U.O.l. [SEN, J.J 35

to the Government servant for the period of his absence from duty, A
and (b) directing whether or not the period of suspension shall be
treated as a period spent on duty. Despite repeated representations
made by the appellant, the Government failed in its duty to pass an
order in terms of FR 54 within a reasonable time. The Government
also failed to comply with the judgment of the learned Single Judge B
and pay to the appellant the arrears of pay and allowances amounting
to about Rs.86,000 till the High Court issued a notice for contempt. It
is regrettable that respondent no. 4 Director General of Works had to
enter personal appearance and tender a written apology. The payment
of Rs.86,000 to the appellant was therefore under threat of contempt
and does not redound to the credit of the Government.
c
The miseries of the appellant did not end with this. The Depart-
ment apparently never forgave the appellant for having dragged the
Government to litigation and compel the personal appearance of the
Head of the Department. It was expected that the Government would
act with good grace but just within a fortnight of the termination of the D
contempt proceedings, the Director General rejected the appellant's
case for crossing of the efficiency bar at the stage of Rs.590 w.e.f.
October 5, 1966 as indicated hereinafter.

In the counter-affidavit to the contempt proceedings, the
Government stated that there were two conditions for an Assistant
Engineer to cross the efficiency bar, namely: (1) that he should have E
passed the departmental examination in Accounts pn;scribed for
Assistant Engineers, and (2) he should have obtained good reports

- over the last five years. The increments above the stage of efficiency
bar are to be allowed in accordance with the provisions contained in
FR 25 and the Government of India's decisions thereunder. The appel-
lant's case for crossing of efficiency bar at the stage of Rs.590 w.e.f. F
October 5, 1966 was said to have been considered by the Departmental
Promotion Committee on the basis of his performance reports.
Evidently, the Departmental Promotion Committee recommended on
the basis of such reports that he was not fit to cross the efficiency bar at
the stage of Rs.590 from October 5, 1966 or on any subsequent date
upto October 5, 1971. The report of the Departmental Promotion G
Committee was accepted by the competent authority. Accordingly, the
Director General of Works on September 17, 1982 passed an order to
the following effect:

"No. 32/426/66. EC. III New Delhi, dated 17 .9.82 H
36 SUPREME COURT REPORTS [1988) 1 S.C.R.

OFFICE MEMORANDUM
A ~I
Sub: Crossing of Efficiency Bar by Shri O.P. Gupta,
Assistant Engineer (Civil), Retired.

The Executive Engineer, Central Stores Division No.
B 1, C.P.W.D. New Delhi is informed that the case of cros-
sing of efficiency bar by Shri O.P. Gupta, Assistant
Engineer (Retired) at the stage of Rs.590 in the pre-revised
scale of pay of Rs.350-25-500-30-590-EB-30-800-EB-30-
830-35-900 has been considered by the competent autho-
rity, who has found him unfit to cross the efficiency bar
w.e.f. 5.10.1966 or from any subsequent date upto
c 5.10.1971."
-\,
The impugned order is not as innocuous as it looks. Just as / .;

suspension of a government servant pending a departmental inquiry is
not by way of punishment, so also the withholding of increments at the
D efficiency bar pending.such inquiry. But when the High Court quashed
the departmental proceedings which were pending for over 20 years
with little or no progress as being wholly invalid and unfair, there was
no occasion for the Department to have passed an order under FR 24
for withholding increments to the appellant at the stage of Rs.590
w.e.f. October 5, 1966 unless it was with a view to penalise him finan-
E cially. As already stated, the authority competent to order reinstate-
ment failed to make an oder in terms of FR 54 after the appellant had
been reinstated in service on May 25, 1970 within a reasonable time.
Looking to the long lapse of time, the High Court was entitled to go
into the question as to whether the appellant upon his reinstatement
was entitled to the full pay and allowances to which he would have
F been entitled had he not been suspended. Undoubtedly, the High
-
Court gave a direction in terms in FR 54(2) that the appellant would be
entitled to his full pay and allowances as also to his increments etc. but
this would be the normal increment prior to the crossing of the effi-
ciency bar for purposes of FR 54(2). There has to be a specific order in
terms of FR 25 before a government servant can be allowed to draw his
G increments above the efficiency bar. The Government was justified in
withholding increments under FR 25 pending the departmental inquiry
but after the High Court had quashed the departmental inquiry, the
question whether the appellant could be deprived of his increments
under FR 25 was a live issue till the controversy was setttled by the
Government of India, Ministry of Finance decision dated September
H 21, 1967. We shall first reproduce FR 25 and it is in the following
terms:
O.P. GUPTA v. U.0.1. [SEN, J.] 37

"Where an efficiency bar is prescribed in a time-scale, the A
increment next above the bar shall not be given to a
Government servant without the specific sanction of the
authority empowered to withhold increment under Rule 24
or the reievant disciplinary rules applicable to the Govern-
ment servant or of any other authority whom the President
may ;by general or special order, authorise in this behalf." B

-f'- The Government of India, Ministry of Finance's decision dated
' ' September 21, 1967 as clarified by Ministry of Home Affairs, Depart-
ment of Personnel & Administrative Reforms Memorandum dated
April 6, 1979, insofar as relevant is reproduced below:

"(7) Procedure for consideration of cases--( a) When dis-
c
ciplinary proceedings are pending-A Government servant
against whom proceedings are pending but who is due to
cross the efficiency bar prescribed in his time-scale of pay,
may not be allowed to cross the bar until after the conclu-
sion of the proceedings. A question was raised as to the D
date from which. a Government servant whose case for
crossing the efficiency bar has not been considered on
account of the pendency of a disciplinary /vigilance case
against him, should be considered for being allowed to
cross the efficiency bar, after the enquiry is over. It has
been decided, in consultation with the Ministry of Home E
Affairs, that if after the conclusion of the proceedings, the
Government servant is completely exonerated, he may be

- allowed to cross the efficiency bar with effect from the due
date retrospectively, unless the competent authority
decides otherwise. If however, the Government servant is
not completely exonerated, his case for crossing the effi- F
ciency bar cannot be considered with retrospective effect
from the due date. Such cases can be considered only with
effect from a date following the conclusion of the disci-
plinary /vigilance case, taking into account the outcome of
the disciplinary/vigilance case.
G
(b) When conduct is under investigation-Same pro-
cedure as at (a) may be followed after the conclusion of the
investigation and where the competent authority on consi-
deration of the results of the investigation, has formed the
opinion that a charge-sheet may be issued to the Govern-
ment servant concerned on specific imputations where H
38 SUPREME COURT REPORTS (1988] 1 S.C.R.

A departmental action is contemplated or that sanction for
prosecution may be accorded where prosecution is pro-
posed. Otherwise, the normal procedure should be
followed .

. . . . . The sealed cover should be opened after con-
B clusion of the proceedings. If he is fully exonerated, the
recommendations in the sealed cover may be considered by
the competent authority who may lift the bar retrospec--, ·"t-
lively from the date recommended by the D.P.C. In that

c
case, the Government servant will be entitled to the arrears
of the increment(s). In case, however, the proceedings do
not result in complete exoneration of the Government
servant, he cannot be allowed to cross the bar with
-
retrospective effect."
}
The relevant provision in r. 2.636 of the C.P.W.D. Manual, Vol.
1, 1956 edn. at p. 53 is in the following terms:
D
"2.636. The Government of India have decided-

(a) that a departmental examination shall be held by
the Chief Engineer twice a year and as far as possible in the
months of January and July every year, for all Divisional
~
E and Sub-Divisional Officers in the Central Public Works
Department;

(f) Divisional and Sub-Divisional Officers who fail to
pass the departmental examination should not ordinarily
be considered either for promotion or for crossing the effi-
-
F ciency bar."
.
;-..__ '
It is somewhat strange that when the appellant applied to the
learned Judge (Wad, J.) for review, he by his order dated February 2,
1983 declined to interfere saying that there was no ground for review
inasmuch as the appellant had not been allowed to cross the efficiency
G bar under FR 25 for two valid reasons, namely: (1) his failure to pass

H
the departmental examination, and (2) his confidential reports for the
preceding five years were not satisfactory. As to the question of the
appellant being afforded an opportunity before an order under FR
54(2) adverse to him was passed by the disciplinary authority, the
learned Judge observed that 'the matter was at large when the petition
for contempt was filed' and further that 'all pros and cons of the matter
~ ;;!
. - '
0.P. GUPTA v. U.0.1. (SEN, J.] 39

had been gone into through the affidavits filed by the parties and at the A
hearing in the Court' and added:

"I do not think that it is necessary to give any further
opportunity to the petitioner for this purpose, particularly
when he has admitted that he has not passed the exami-
nation." B

The learned Judge failed to appreciate that no prejudicial order under
FR 25 could be made without giving the appellant an opportunity of a

- j:
hearing as it visited him with civil consequences. The appellant was
thus constrained to move another application for review. This time the
learned Judge by his order dated November 30, 1983 dismissed the C
application observing that no ground for review had been made out
and that the earlier order declining to review had been passed after
_.\ fully hearing the parties and no further relief could be granted. But he
added a rider that if the appellant was not satisfied with the Govern-
ment decision, his remedy was. to file a separate writ petition.
D
Thereupon, the appellant went up in appeal but a Division
Bench by its order dated April 30, 1984 dismissed the same and
reiterated that he should file a writ petition. The appellant accordingly
filed a petition under Art. 226 of the Constitution to enforce his right
to increments after the crossing of the efficiency bar under FR 25.
Again, a Division Bench by its order dated October 30, 1984 declined to E
interfere saying that the appellant should make a representation to the
competent authority with the direction that the same should be con-

- sidered sympathetically. In accordance therewith, on December 10,
1984 the appellant made a representation to the Director General of
Works, Central Public Works Department. He thereafter addressed
several communications to the authorities on the subject. Eventually, F
the Deputy Director of Administration by her letter dated April 9,
1985 informed the appellant that his representation had been rejected.
She further intimated the appellant the following order with respect to
his crossing of the efficiency bar under FR 25.

"I am further to inform you that your case for crossing the G
E.B. at the stage of Rs.590 w.e.f. 5.10.1972 in the pre-
revised scale of Rs.350-25-500-30-590-EB-30-800-EB-30-
830-35-900 and also at the stage of Rs.810 in the revised
scale of Rs. 650-30-740-35-810-EB-35-880-40-1000-EB-40-
1200, w.e.f. 5-10.1973 or from any subsequent date upto
the date of your superannuation viz. 31.3.1978 has also H
40 SUPREME COURT REPORTS [ 1988] 1 S.C.R.

A been considered carefully by the competent authority. It is
regretted that you have not been found fit to cross the E.B.
w.e.f. 5.10.1972 at the stage of Rs.590 in the pre-revised
scale of Rs .35()..25-500-30-590-EB-30-800-EB-30-830-35-
900, as also at the stage of Rs.810 in the revised scale of
Rs. 650-30-740-35-810-EB-35-880-40-1000-EB-40-1200,
B w .e.f. 5.10.1973 or from any subsequent date upto the date
of your superannuation viz. 31.3.1978."

On July 10, 1985 the appellant filed the present petition under
Art. 226 of the Constitution for redressal of his grievance as regards
the crossing of the efficiency' bar at the stages indicated in the im-
C pugned order and also for grant of interest on delayed payment of
pension. A Division Bench (D.K. Kapur and Mahinder Narain, JJ .) by
-
its order dated July 24, 1985 dismissed the writ petition. It held that the
crossing of the efficiency bar depends on satisfaction of the competent
authority under FR 25 and also on the passing of the departmental
examination under r. 2.636 of the C.P.W.D. Manual, Vol. 1, 1956
D edn. at p. 53. It further observed that the sanction of the authority
competent under FR 25 was not forthcoming and that 'if the authority
concerned had chosen not to give the sanction, the Court had no
jurisdiction to interfere particularly as the appellant was not actually in
office for such a long period of time'. Curiously enough, the Division
Bench also added that it felt, considering the harassment to which the
E appellant had been subjected during the long years of suspension, it
was a fit case in which the authority concerned should have granted the
requisite sanction.

We have set out the facts in sufficient detail to show that there is
no presumption that the Government always acts in a manner which is
-
F just and fair. There was no occasion whatever to protract the depart-
mental inquiry for a period of 20 years and keeping the appellant (-
under suspension for a period of nearly 11 years unless it was actuated
with the mala fide intention of subjecting him to harassment. The
charge framed against the appellant was serious enough to merit his
dismissal from service. Apparently, the departmental authorities were
G not in a position to substantiate the charge. But that was no reason for
keeping the departmental proceedings alive for a period of 20 years
and not to have revoked the ordel'of suspension for over 11 years. An
order of suspension of a government servant does not put an end to hiS \"->
service under the Government. He continues to be a member of the ...- ·
serv!ce in spite of the order of suspension. The real effect of the order
H of suspension as explained by this Court in Khem Chand v. Union of
O.P. GUPTA .v. U.0.1. (SEN, J.] 41

India, [1958] SCR 1080 is that he continues to be a member of the
A
government service but is not permitted to work and further during the
period of suspension he is paid only some allowance-generally called
subsistence allowance-which is normally less than the salary instead
of the pay and allowances he would have been entitled to if he had not
been suspended. There is no doubt that an order of suspension unless
the departmental inquiry is concluded within a reasonable time, affects B
a government servant injuriously. The very expression 'subsistence
allowance' has an undeniable penal significance. The dictionary mean-
ing of the word 'Subsist' as given in Shorter Oxford English Dictio-
nary, Vol. II a\ p. 2171 is "to remain alive as on food; to continue to
exist". "Subsistence" means-means of supporting life, especially a
minimum livelihood. Although suspension is not one of the punish-
ments specified in r. 11 of the rules, an order of suspension is not to be
c
lightly passed against the government servant. In the case of Board of
Trustees of the Port of Bombay v. Dilip Kumar Raghavendranath
Nadkami & Ors., [1983] 1 SCR 828 the Court held that the expression
'life' does not merely connote animal existence or a continued
drudgery through life. The expression 'life' has a much wider meaning. D
Suspension in a case like the present where there was no question of
inflicting any departmental punishment prima facie tantamounts to
imposition of penally which is manifestly repugnant to the principles of
natural justice and fairplay in action. The conditions of service are
within the executive power of the State or its legislative power under
the proviso to Art. 309 of the Constitution, but even so such rules have E
to be reasonable and fair and not grossly unjust. It is a clear principle
of natural justice that the delinquent officer when placed under
suspension is entitled to represent that the departmental proceedings
should be concluded with reasonable diligence and within a reasonable
period of time. If such a principle were not to be recognised, it would
imply that the Executive is being vested with a totally arbitrary and F
unfettered power of placing its officers under disability and distress for
an indefinite duration.

It is a fundamental rule of law that no decision must be taken
which will affect the rights of any person without first giving him an
opportunity of putting forward his case. Both the Priry Council as well G
as this Court have in a series of cases required strict adherence to the
rules of natural justice where a public authority or body has to deal
with rights. There has ever since the judgment of Lord Reid in Ridge v.
Baldwin LR [1964] AC 40 been considerable fluctuation of judicial
opinion in England as to the degree of strictness with which the rules
of natural justice should be extended, and there is growing awareness H
42 SUPREME COURT REPORTS [1988] 1 S.C.R.

A of the problems created by the extended application of principles of
natural justice, or the duty to act fairly, which tends to sacrifice the
administrative efficiency and despatch, or frustrates the obJect of the
law in question. Since this Court has held that Lord Reid's judgment in
Ridge v. Baldwin should be of assistance in deciding questions relating
to natural justice, there is always 'the duty to act judicially' whenever
B the rules of natural justice are applicable. There is therefore the insis-
tence upon the requirement of a 'fair hearing'. In the light of these
settled principles, we have no doubt whatever that the Government
acted in flagrant breach of the rules of natural justice or fairplay in
passing the impugned order. We do not see why the principles enun-
ciated by the Court in M. Gopala Krishna Naidu v. State of Madhya
C Pradesh, [ 1968] 1 SCR 355 should not apply with equal vigour to a case
like the present. There is no reason why the power of the Government
to direct the stoppage of increments at the efficiency bar on the ground
of unfitness or otherwise after his retirement which prejudicially
affects him should not be subject to the same limitations as engrafted
by this Court in M. Gopala Krishna Naidu while dealing with the
D power of the Government in making a prejudicial order under FR 54,
namely, the duty to hear the government servant concerned after giv-
ing him full opportunity to make out his case.

Under FR 54 when a government servant who had been dismis-
sed, removed or suspended is reinstated, the authority competent to
E order the reinstatement shall make a specific order (a) regarding the
pay and allowances to be paid to the government servant for the period
of his absence from duty, and (b) directing whether or not the said
period shall be treated as a period spent on duty. In the present case,
the Government failed in its duty to pass an order in terms of FR 54
despite repeated representations made by the appellant in that behalf.
F The learned Single Judge was therefore justified in dealing with the
--
question whether or not the period of suspension should be treated as
a period spent on duty and to make a direction regarding payment of
the full pay and allowances as also to increments to which he would
have been entitled to but for the disciplinary proceedings. In M.
Gopala Krishna Naidu's case the civil servant concerned had been
G exonerated of the charges framed against him in a departmental in-
quiry. The Government however held that the appellant's suspension
in that case and the departmental inquiry instituted against him 'were
not wholly unjustified' and tried to support its action in this Court on
the ground that the making of an order under FR 54 was a consequen-
tial order. This Court repelled the contention and held that an order
H passed under FR 54 is not always a consequential order or a mere
0.P. GUPTA v. U.0.1. (SEN, .1] 43

continuation of the departmental proceedings against the delinquent A
...-,- civil servant. Inasmuch as consideration under FR 54 depends on facts
and circumstances in their entirety, and since the order may result in
pecuniary loss to the government servant, consideration under the rule
'must be held to be an objective rather than a subjective considera-
tion'. Shela!, J. who delivered the judgment of the Court went on to
observe: B

"The very nature of the function implies the duty to act
t judicially. In such a case if an opportunity to show cause
against the action proposed is not afforded, as admittedly it
<
was not done in the present case, the order is liable to be
struck down as invalid on the ground that it is one in breach
of the principles of natural justice."
c
1.
There is thus a duty to hear the concerned Government servant
~
under FR 54 before any prejudicial order is made against him. The
same principle was reiterated in B.D. Gupta v. State of Haryana,
[ 1973) 2 SCR 323. D

It must follow that when a prejudicial order is made in terms of
FR 25 to deprive the government servant like the appellant of his
increments above the stage of efficiency bar retrospectively after his
retirement, the Government has the duty to hear the concerned
government servant before any order is made against him. There has E
-" to be as laid down in M. Gopala Krishna Naidu's case an objective
consideration and assessment of all the relevant facts and circum-
stances.

We find it difficult to subscribe to the doctrine evolved by the
Division Bench that if the competent authority declines to sanction the F
crossing of the efficiency bar of a government servant under FR 25, the
Court has no jurisdiction to grant any relief. No doubt, there has to be
a specific order in terms of FR 25 by the competent authority before
the government servant can get the benefit of increments above the
stage of efficiency bar. The stoppage of such increments at the effi-
ciency bar during the pendency of a departmental proceeding is not by G
way of punishment and therefore the government servant facing a
departmental inquiry is not entitled to a hearing. Ordinarily, there-
fore, the Court does not come into the picture at that stage. But in a
case like the present where despite the fact that the departmental
inquiry against the appellant had been quashed, and it has been held
by the High Court that his suspension was wholly without justification, H
44 SUPREME COURT REPORTS [1988] 1 S.C.R.

there was no occasion for the competent authority to enforce the bar
A
against him under FR 25, particularly after his retirement, unless it
was by way of punishment. That being so, the order passed by the
competent authority under FR 25 prejudicial to the interests of the
appellant in such circumstances must be subject to the power of judicial
review.
B
The reasoning of the learned Single Judge that the authority
competent was justified in refusing to allow the crossing of the effi-
ciency bar under FR 25 in the case of the appellant on the ground that
( 1) the appellant did not have good record of service over the last five
years preceding his compulsory retirement, and (2) he had not passed
the departmental examination in Accounts prescribed for Assistant
c Engineers, does not bear scrutiny. In the first place, there was no
question of the appellant having an adverse record for five years pre-
ceding his compulsory retirement since for three years he was under
suspension and, according to the learned Judge himself, for the next
two years there was nothing blameworthy against him. Secondly, the
D failure to pass a departmental examination under r. 2.636 obviously
could not stand in the way of the appellant since he had already been
compulsorily retired. The appellant having compulsorily retired on
July 28, 1972 and also having reached his normal age of superannua-
tion on March 31, 1978, his failure to pass the departmental examina-
tion under r. 2.636 could not be treated as a ground for denying him
E the benefit of crossing the efficiency bar under FR 25. The word 'ordi-
narily' in r. 2.636 must be given its plain meaning as 'in normal
circumstances'.

It is extremely doubtful whether in a case like the present the
Director General of Works, Central Public Works Department, as the
F competent authority, could at all have taken a decision to enforce the
-
bar under FR 25 against the appellant after his retirement. That apart,
the competent authority acted in flagrant breach of the instructions
contained in the Note beneath Government of India, Ministry of
Finance Memorandum dated April 23, 1962, as amended from time to
time. It enjoins that the cases of government servants for crossing of
G the efficiency bar in the time-scale of pay should be considered at the
appropriate time and in case the decision is to enforce the bar against
the government servant, he should be informed of the decision. This
clearly implies that the competent authority must conform to the rules
of natural justice. It would be a denial of justice to remit back the
matter to the competent authority to reach a decision afresh under FR
H 25, in the facts and circumstances of the present case.
O.P. GUPTA v. U.0.1. [SEN, J.] 45

The public interest in maintaining the efficiency of the services A
requires that civil servants should not be unfairly dealt with. The
Government must view with concern that a departmental inquiry
<1gainst the civil servant should have been kept alive for so long as 20
years or more and that he should have been placed under suspension
without any lawful justification for as many as 11 years, without any
B
progress being made in the departmental inquiry. It should also view
with concern that a decision should have been taken by the competent
authority to enforce the bar under FR 25 against the civil servant long
+ after his retirement with a view to cause him financial loss. Such a
course not only demoralises the services but virtually ruins the career
of the delinquent officer as a government servant apart from subject-
ing him to untold hardship and humiliation. We hope and trust that the C
Government in future would ensure that departmental proceedings are
concluded with reasonable diligence and not allowed to be protracted
unnecessarily. The Government should also view with concern that
there should be an attempt on the part of the competent authority to
enforce the bar against a civil servant under FR 25 long after his D
retirement without affording him an opportunity of a hearing. It comes
of ill-grace from the Government to have defeated the just claim of the
appellant on technical pleas.

Normally, this Court, as a settled practice, has been making
direction for payment of interest at 12% on delayed payment of pen-
.; sion. There is no reason for us to depart from that practice in the facts E
of the present case.

The result therefore is that the appeal succeeds and is allowed
with costs. The judgment and order passed by the High Court are set
aside and the writ petition is allowed. The impugned orders passed by F
the Director General of Works, Central Public Works Department
' dated September 17, 1982 and April 9, 1985 declining to permit the
\ appellant to cross the efficiency bar at the stage of Rs.590 in the
pre-revised scale of Rs.350-900 w.e.f. October 5, 1966 as also from
October 5, 1972, and also at the stage of Rs.810 in the revised scale of
Rs.650-1200 w.e.f. October 5, 1973 or from any subsequent date upto
March 31, 1978, ,the date of his superannuation, are quashed. We G
direct the Director General of Works to make an order in terms of FR
25 allowing the appellant to cross the efficiency bar at the stage of
Rs.590 w.e.f. October 5, 1966 and at the stage of Rs.810 w.e.f.
October 5, 1973 and subsequent dates, according to the decision of the
Government of India, Ministry of Finance dated September 21, 1967 H
46 SUPREME COURT REPORTS [1988) I S.C.R.

A as later clarified by the Ministry of Home Affairs Memorandum dated
April 6, 1979 and to re-flX bis salary upon that basis and pay the
difference, as also re-flX his pension accordingly. The appellant would
be entitled to interest at 12% per annum on the difference in salary as
well as in pension. We further direct that the Government of India wil~
B make the payment to the appellant within four months from today.

P.S.S. Appeal allowed.

}