Tarsem Singh vs Punjab State and Another

Ajay Tewari, J.—This appeal has been filed against the judgment and decree of the first appellate Court dated 16.12.1987 setting aside the judgment and decree of the trial Court dated 4.8.1986 whereby the suit of the appellant challenging eight orders of punishment stopping increments with cumulative effect, and ninth order forfeiting service prior to 19.1.1973 was decreed in favour of the appellant.

Details of the orders challenged are as under:-

(i) No. 7638/ECC, dated 6.11.1970, stoppage of one increment with cumulative effect;

(ii) No. 6115/ECC, dated 20.9.1971, stoppage of one increment;

(iii) No. 1301/Steno/GM, dated 4.9.1975, stoppage of two increments;

(iv) No. 878/TA, dated 12.7.1976, stoppage of two increments;

(v) No. 1320/Steno/GM, dated 5.9.1975, stoppage of two increments;

(vi) No. 1326/Steno/GM, dated 5.9.1975, stoppage of one increment;

(vii) No. 9469/TA, dated 29.9.1977, stoppage of one increment;

(viii) No. 2199/TA, dated 16.5.1984, stoppage of one increment;

(ix) 58713/TA(Appeal), iii, dt. 22.12.72, and No. 131-37-ACC, dated 19.11.73, forfeiting of service prior to 19.1.1973.

The suit was filed on 28.3.1985. The trial Court declared all the orders illegal, null and void and decreed the suit in favour of the appellant. The lower appellate Court, however, set aside the judgment of the trial Court by holding that the suit was clearly barred by time.

No question of law was proposed when this appeal was filed. However, today counsel for the appellant has proposed the following question of law:-

Whether the suit could be barred by limitation?

Whether the order of withdrawing increments with cumulative effect is a minor punishment?

Counsel for the appellant has argued that no inquiry was held against the appellant and only show cause notices were issued. He has relied upon Kulwant Singh Gill Vs. State of Punjab, wherein the Hon''ble Supreme Court held as follows:-

Withholding of increments of pay simpliciter undoubtedly a minor penalty within the meaning of Rule (iv). But sub-rule (v) postulates 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 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 independent head of penalty and it could be imposed as punishment 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 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 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. Withholding of increments of pay simpliciter without any hedge over it certainly comes within the meaning of Rules 5(iv) of the Rules. But when penalty was imposed withholding two increments i.e. for two years with cumulative effect, it would indisputably means that the two increments earned by the employee were 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 timescale 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 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 to 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 perspective the effect is as envisaged under Rule 5(v) of the Rules. It is undoubted that the Division Bench in Sarwan Singh Vs. The State of Punjab and Others, speaking for the division bench, while considering a similar question, in paragraph 8 held that the stoppage of increments with cumulative effect, by no stretch of imagination falls within clause (v) of Rules 5 in rule 4.12 of Punjab Civil 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 is 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 where the increments are withheld 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 the 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 that conclusion. But is the effect is kept at the back of 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 storage of increments, of earning future increments in the time scale of pay even permanently without expressly stating so. This preposterous consequence 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 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 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, de hors the rules is no enquiry in the eye of law. It cannot be countenanced that the pretense of an enquiry without reasonable opportunity of abducting 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 meanings 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 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 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 is to consider it in the mariner prescribed and to 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 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 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 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 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. Appeal allowed.

In view of authority to pronouncement, it has to be held that the order vide which the punishment of stoppage of increments with cumulative effect is passed, is a major punishment and cannot be held without inquiry. As regards the plea of limitation learned Deputy Advocate General has placed reliance on the judgment of the Hon''ble Supreme Court in State of Punjab and Another Vs. Balkaran Singh, . He has placed particular reliance on paragraph 16, which is as under:-

It was argued on behalf of the plaintiffs, as was done in the trial court, that the cause of action must be held to be a recurring one and hence the suit must be held to be not barred by limitation. Reliance was placed on the decision in Amrit Lal Berry and Another Vs. Collector of Central Excise, New Delhi and Others, That decision arose from a proceeding under Article 32 of the Constitution of India. It was not a suit. There was no occasion for this Court to consider the scope of Article 58 of the Limitation Act in that writ petition. It was only stated that when a citizen aggrieved by the action of the government department had approached the court and obtained declaration of law in his favour, others, in like circumstances, should be able to rely on the sense of responsibility of the department concerned and to expect that they will be given the benefit of this declaration without the need to take their grievance to the court. This is hardly a defence to a plea based on Article 58 of the Limitation Act in respect of the relief of declaration with respect to an order which was issued twelve years prior to the suit and which immediately affected the pay receivable by them. In fact this Court in S.S. Rathore Vs. State of Madhya Pradesh, , a decision rendered by seven Hon''ble Judges, has clearly held in suits relating to service matters, that: (SCC p. 591, para 21)

Yet, suits outside the purview of the Administrative Tribunals Act shall continue to be governed by Article 58. In a series of subsequent decisions, this Court has held that a suit for declaration in matters relating to a service is governed by Article 58 of the Limitation Act, 1963. (See for instance, Mohd. Quaramuddin (Dead) by Lrs. Vs. State of A.P., Vasant Ramchandara Deshpande Vs. State of Maharashtra and Others, In State of Punjab and Others Vs. Gurdev Singh, a three-Judges Bench of this Court held that a party aggrieved by the order, even if it is found to be void, has to approach the court for relief of declaration that the order against him is inoperative and void within three years of the order.

Learned counsel for the appellant has however placed reliance of Union of India (UOI) and Others Vs. Tarsem Singh, Recent Apex Judgments (R.A.J.) 203 : (2008) 8 SCC 648 wherein the Hon''ble Supreme Court has held as follows:-

To summarise, normally, a belated service related claim will be rejected on the ground of delay and laches (where remedy is sought by filing a writ petition) or limitation (where remedy is sought by an application to the Administrative Tribunal). One of the exceptions to the said rule is cases relating to a continuing wrong. Where a service related claim is based on a continuing wrong, relief can be granted even if there is a long delay in seeking remedy, with reference to the date on which the continuing wrong commenced, if such continuing wrong creates a continuing source of injury. But there is an exception to the exception. If the grievance is in respect of any order or administrative decision which related to or affected several others also, and if the reopening of the issue would affect the settled rights of third parties, then the claim will not be entertained. For example, if the issue relates to payment or re-fixation of pay or pension, relief may be granted in spite of delay as it does not affect the rights of third parties. But if the claim involved issues relating to seniority or promotion, etc., affecting others, delay would render the claim stale and doctrine of laches/limitation will be applied. Insofar as the consequential relief of recovery of arrears for a past period is concerned, the principles relating to recurring/successive wrongs will apply. As a consequence, the High Courts will restrict the consequential relief relating to arrears normally to a period of three years prior to the date of filing of the writ petition.

Both the aforementioned judgments have been rendered by a Division Bench consisting of two Hon''ble Judges. In this connection, this Court is to be guided by the principles as laid down by the Full Bench of this Court in Indo Swiss Time Limited Vs. Umrao and Others, , wherein it was held as follows:-

Now the contention that the latest judgment of a coordinate Bench is to be mechanically followed and must have pre-eminence irrespective of any other consideration does not commend itself to me. When judgments of the superior court are of co-equal benches and therefore of matching authority then their weight inevitably must be considered by the rationale and the logic thereof and not by the mere fortuitous circumstances of the time and date on which they were rendered. It is manifest that when two directly conflicting judgments of the superior Court and of equal authority are extent than both of them cannot be binding on the courts below. Inevitably a choice though a difficult one has to be made in such a situation. On principles of it appears to me that the high Court must follow the judgment which appears to it to lay down the law more elaborately and accurately. The mere incidence of time whether the judgments of co-equal Benches of the Superior Court are earlier or later is a consideration which appears to me as hardly relevant.

On a careful consideration of the respective contentions of the learned counsel for the parties, in the light of various decisions cited by them, it transpires that the view taken in the judgment of the Supreme Court in Himalaya Tiles and Marble (P) Ltd. Vs. Francis Victor Coutinho (dead) by LR''s., on which reliance has been placed by Mr. Sarin, is in conflict with the view taken in the earlier judgment in Municipal Corporation of the City of Ahmedabad''s case (1970) 1 SCWR 183 (supra). As observed by my Lord the Chief justice, a perusal of the two judgments plainly indicates that there is a direct conflict on the point which needs our decision. Both the judgments have been rendered by a Bench consisting of two Hon''ble judges and cannot possibly be reconciled. In this situation a some what interesting though tricky question arise for determination i.e., when there is a direct conflict between the two decisions of the Supreme Court rendered by coequal Benches, which of them should be followed by the High Courts and the courts below.

On this question, my Lord the Chief Justice in his elaborate judgment has held that the Courts may follow the judgment which appears to them to state the law accurately and that mere incidence of time whether the judgment of the co-equal Benches of the superior Court are earlier of later is a consideration which appears to be hardly relevant. I have also given my thoughtful consideration to the entire matter and find myself in respectful agreement with the aforesaid observation of my Lord the Chief Justice.

In my opinion, the judgment in the case of Tarsem Singh (supra) states the law more accurately. Resultantly, both the questions of law proposed have to be answered in favour of the appellant. Consequently, the judgment and decree dated 16.12.1987 is set aside and that of the trial Court dated 4.8.1986, it has to be allowed since by these orders punishment of stoppage of increment with cumulative effect was imposed without holding any inquiry. However, the benefit thereof would be granted to the appellant only for a period of 3 years and 2 months prior to the date of filing of the suit viz. 28.3.1985.

No costs.