WP/12602/1999 of G. Sudhakar Kumar Vs A.P. Industrial Infrastructure Corpn. Ltd., on 26 December 2008

ORDER:

This Writ Petition is filed for a writ of Certiorari to quash order,dated 24.12.1998, whereby the penalty of stoppage of threeincrements with cumulative effect has been imposed on the petitioner.

Heard Sri Abhinand Kumar Shavili, learned counsel for thepetitioner, and Sri K.V.Simhadri, learned Standing Counsel for therespondent.

The petitioner, at the relevant time, was the Zonal Manager ofthe respondent-Corporation. An Enquiry Officer was appointed to lookinto the allegations made against the petitioner with regard toexecution of a work between 13.06.1996 and 01.07.1997 by acontractor and payment of bills to him to the extent of Rs.27,742.63

paise under L.S.II and part. On 17.07.1998, the Executive Director(Finance) of the Corporation issued memorandum of charges and thepetitioner was directed to submit his explanation to the said charges.Accordingly, the petitioner submitted his explanation. Purporting toconsider the said explanation, the Chairman and Managing Director ofthe Corporation passed the impugned order, whereby the above-mentioned penalty of stoppage of three increments with cumulativeeffect has been imposed on the petitioner. This order is questioned inthis Writ Petition.

At the hearing, learned counsel for the petitioner submitted thatthe penalty of stoppage of three increments with cumulative effectcannot be treated as a minor penalty, and therefore, such a penaltycould not have been imposed on the petitioner by the respondent,without holding an enquiry. In support of his contention, learnedcounsel relied on the judgment of the Supreme Court in KulwantSingh Gill v. State of Punjab[[1]].

Learned Standing Counsel submitted that under Rule 27(3) ofthe Conduct, Discipline and Appeals Regulations, 1974 (for short ‘theRegulations’) withholding of increments or promotions was includedunder the head “minor penalties” at the relevant time when punishmentwas imposed on the petitioner, and therefore, there was no need forholding an enquiry.

In Kulwant Singh Gill (supra), a rule in Punjab Civil Services(Punishment and Appeal) Rules, which is identical to the Regulationsin the present case to the extent of withholding of increments orpromotions, fell for consideration of the Apex Court. While rejectingthe contention advanced on behalf of State of Punjab that withholdingof increments having been included under the head “minor penalties”there was no need to hold an enquiry, the Supreme Court held asunder:

“Withholding of increments of pay simpliciterundoubtedly is a minor penalty within the meaning of Rule5(iv). But sub-rule (v) postulates reduction to a lower stage inundoubtedly is a minor penalty within the meaning of Rule5(iv). But sub-rule (v) postulates reduction to a lower stage in

the time scale of pay for a specified period with furtherdirections as to whether or not the government employee shallearn increments of pay during the period of such reductionsand whether on the expiry of such period the reduction will orwill not have the effect of postponing the future increments ofhis pay. It is an independent head of penalty and it could beimposed as punishment in an appropriate case. It is one ofthe major penalties. The impugned order of stoppage of twoincrements with cumulative effect whether would fall within themeaning of Rule 5(v)? If it so falls Rules 8 and 9 of the Rulesrequire conducting of regular enquiry. The contention of ShriNayar, learned counsel for the State is that withholding twoincrements with cumulative effect is only a minor penalty as itdoes not amount to reduction to a lower stage in the timescale of pay. We find it extremely difficult to countenance thecontention. Withholding of increments of pay simpliciterwithout any hedge over it certainly comes within the meaningof Rule 5(iv) of the Rules. But when penalty was imposedwithholding two increments i.e. for two years with cumulativeeffect, it would indisputably mean that the two incrementsearned by the employee was cut off as a measure of penaltyfor ever in his upward march of earning higher scale of pay. In other words the clock is put back to a lower stage in thetime scale of pay and on expiry of two years the clock startsworking from that stage afresh. The insidious effect of theimpugned order, by necessary implication, is that theappellant employee is reduced in his time scale by two placesand it is in perpetuity during the rest of the tenure of hisservice with a direction that two years’ increments would notbe counted in his time scale of pay as a measure of penalty. The words are the skin to the language which if peeled off itstrue colour or its resultant effects would become apparent. When we broach the problem from this perspective the effectis as envisaged under Rule 5(v) of the Rules. It is undoubtedthat the Division Bench in Sarwan Singh v. State of Punjab(ILR (1985) 2 P & H 193: (1985) 1 SLJ 513 (P&H), P.C.Jain,A.C.J. speaking for the Division Bench, while consideringsimilar question, in paragraph 8 held that the stoppage ofincrements with cumulative effect, by no stretch ofimagination falls within clause (v) of Rules 5 or in Rule 4.12 ofPunjab Civil Services Rules. It was further held that underclause (v) of Rule 5 there has to be a reduction to a lowerstage in the time scale of pay by the competent authority as ameasure of penalty and the period for which such a reductionis to be effective has to be stated and on restoration it hasfurther to be specified whether the reduction shall operate topostpone the future increments of his pay. In such cases

withholding of the increments without cumulative effect doesnot at all arise. In case where the increments are withheldwith or without cumulative effect the government employee isnever reduced to a lower stage of time scale of pay. Accordingly it was held that clause (iv) Rule 5 is applicable tothe facts of that case. With respect we are unable to agreewith the High Court. If the literal interpretation is adopted thelearned Judges may be right to arrive at that conclusion. Butif the effect is kept at the back of the mind, it would always beso, the result will be the conclusion as we have arrived at. Ifthe reasoning of the High Court is given acceptance, it wouldempower the disciplinary authority to impose, under the garbof stoppage of increments, (sic stoppage) of earning futureincrements in the time scale of pay even permanently withoutexpressly stating so. This preposterous consequence cannotbe permitted to be permeated. Rule 5(iv) does not empowerthe disciplinary authority to impose penalty of withholdingincrements of pay with cumulative effect except after holdinginquiry and following the prescribed procedure. Then theorder would be without jurisdiction or authority of law, and itwould be per se void. Considering from this angle we have nohesitation to hold that the impugned order would come withinthe meaning of Rule 5(v) of the Rules; it is a major penalty andimposition of the impugned penalty without enquiry is per seillegal.”

Learned Standing Counsel while conceding that the rule, whichis considered by the Supreme Court in the above judgment, is identicalto the Regulations in the instant case with respect to the imposition ofpenalty of withholding of increments, however, submitted that thepetitioner failed to question the vires of this Regulation. I find no forcein the contention of learned Standing Counsel, because the rule didnot in express terms provide that withholding of increment withcumulative effect falls under the head of “Minor Penalties”. It onlyprovides that withholding of increments or promotions is a minorpenalty. On the reasoning of the Supreme Court in the above-mentioned case while withholding of increments simpliciter is in thenature of minor penalty, withholding of increment with cumulativeeffect, which as a consequence will have the effect of reduction tolower post or grade or to a lower stage, constitutes “major penalty”. In effect, the Supreme Court drew a distinction between withholding ofincrement simpliciter and withholding of increment with cumulativeeffect, and construed the latter penalty as falling under “reduction tolower post or grade or to a lower stage” under the head “MajorPenalties.” It is significant to note that in the instant Regulations, theabove-mentioned penalty is included as clause (a) under the head“Major Penalties”. Hence, following the ratio laid down by theSupreme Court in the above-mentioned judgment, the penalty imposedon the petitioner shall be treated as a major penalty. Admittedly, noenquiry has been conducted, after the issuance of charge memo. Even according to the Regulations of the Corporation, the imposition ofpenalty shall be preceded by holding of enquiry, in case a majorpenalty is proposed to be imposed. As no such enquiry is held, theimpugned order is quashed. Liberty is given to the respondent toinitiate the enquiry proceedings afresh, if it so desires.

With the above observations, the Writ Petition is allowed.

Dated:26.12.2008

________________________

C.V.NAGARJUNA REDDY, J

GJ

[1]1991 Supp (1) Supreme Court Cases 5041991 Supp (1) Supreme Court Cases 504