Full Judgment Text
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 8366 OF 2014
[Arising out of S.L.P. (Civil) No. 1638 of 2014]
Punjab State Electricity Board
Now Punjab State Power Corporation Ltd. ...
Appellant
Versus
Raj Kumar Goel ...
Respondent
J U D G M E N T
Dipak Misra, J.
JUDGMENT
Leave granted.
2. In this appeal, by special leave, the assail is to the
judgment and decree dated 25.07.2013 passed by the
learned Single Judge of High Court of Punjab and Haryana
at Chandigarh in R.S.A. No. 796 of 2012 whereby the High
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Court has affirmed the judgment and decree passed by
the Courts below.
3. The broad essential facts which are to be stated for
adjudication of this appeal are that the respondent-plaintiff
joined the services of the appellant – Punjab State Electricity
Board (for short ‘the Board’) on 17.12.1984 as Lower
Division Clerk. As the respondent-plaintiff remained absent
from duty without sanctioned leave from 9.7.1987 for a
considerable time, a disciplinary proceeding was initiated
against him. After following due procedure as envisaged
under Punjab State Electricity Board Employees (Punishment
& Appeal) Regulations, 1971, the competent authority
imposed the punishment of stoppage of five annual
increments without cumulative effect and further the period
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of absence mentioned in the Show Cause Notice was
directed to be treated as non-duty period.
4. Being aggrieved by the aforesaid punishment, the
respondent filed Suit No. 155 of 2006 for declaration that
the manner in which the said order of punishment was
sought to be implemented by the authorities was illegal
and absolutely unjustified. It was averred in the plaint
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that the effect of stoppage of five increments without
cumulative effect should mean that the Board shall
release each year’s increment before stoppage of
increment in the ensuing year. It is apt to state here that
the respondent did not challenge the findings recorded by
the disciplinary authority nor did he call in question the
quantum of punishment inflicted on him vide order dated
9.8.2002.
5. The Board entered contest in the suit and explained
the position as regards the nature of punishment
contending, inter alia, that the effect of an award of
stoppage of five increments without cumulative effect
would mean that increments for period of five years
would be released all together at the end of five years
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and as such, no illegality and/or irregularity has been
committed by the Board in implementation of its orders.
6. The learned Civil Judge, Senior Division, Patiala
framed five issues which basically pertain to a singular
compartment, namely, whether the plaintiff is entitled for
declaration to the effect whether the defendants wrongly
and illegally had implemented order No. 329 dated
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9.8.2002 as a consequence of which the plaintiff has
suffered future loss and, if so, to what relief he was
entitled to.
7. The learned trial Judge on the basis of material
brought on record decreed the suit by directing payment
of arrears accruing due to respondent from the date of
accrual (at the end of each year and before stoppage of
next increment) till its realization with interest @ 18% per
annum. The finding recorded by the learned trial Judge
was to the following effect:
“As per Punjab State Electricity Board
Employees (Punishments & Appeal)
Regulations; 1971, withholding of
increments of pay without cumulative
effect comes within the definition of
minor penalties. Moreover, 5 increments
were stopped without cumulative effect,
but in this way implementation order
shows that actually 15 increments of
plaintiff have been stopped and he has
suffered major financial loss. With
regard to the authorities relied upon by
counsel for plaintiff these are not directly
applicable to the present case and it is
only guidance to this Court how to
interpret the words and phrases as
enshrined in rules. Certainly this Court
has to take guidance of such authorities
to interpret the words when there is no
earlier interpretation by Hon’ble High
Court or Hon’ble Supreme Court of India,
nor brought to the notice of this Court.
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In considered view of this Court, the
defendants have wrongly implemented
the order dated 09.08.2002. Plaintiff is
certainly entitled for decree of
declaration to this effect and he is
entitled for restoration of his increments
after every one year of its stoppage.”
8. Being aggrieved, the appellant-Board preferred Civil
Appeal No. 9 of 2009 before the learned Additional
District Judge, Patiala, who by judgment and decree dated
23.8.2011 dismissed the appeal.
9. Being dissatisfied with the dismissal of appeal the
Board preferred R.S.A. No. 796 of 2012 before the High
Court. The learned Single Judge appreciated the
reasoning given by the courts below and came to hold
that the manner in which the order was sought to be
implemented would result in stoppage of fifteen
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increments of the respondent, which is against the spirit
of the order of punishment and, in fact, tantamounts to
imposition of stoppage of increments with cumulative
effect. The aforesaid conclusion ultimately led to the
dismissal of the appeal in limine, for the learned Single
Judge did not find any substantial question of law
involved in the second appeal.
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10. We have heard learned counsel for the parties and
perused the record.
11. At the very outset, we may clearly state there is no
discord or dispute over the exposition of facts. The
controversy has arisen with regard to implementation of
the order of punishment imposed by the authority on the
delinquent employee. The courts below have opined that
though it is mentioned in the order of punishment that
there is stoppage of five increments without cumulative
effect which is a minor punishment yet the manner of
implementation converts it to a major punishment. There
can be no cavil over the proposition that when a
punishment of stoppage of an increment with cumulative
effect is imposed, it is a major punishment. In this
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regard, we may refer with profit to the decision in
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Kulwant Singh Gill v. State of Punjab wherein it has
been held that withholding of increments of pay
simpliciter without any hedge over it certainly would be a
minor punishment but withholding of increments with
cumulative effect, the consequences being quite
hazardous to the employee, it would come in the
1
1991 Supp(1) SCC 504
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compartment of major punishment. Proceeding further
the two Judge Bench stated thus:
“But when penalty was imposed
withholding two increments i.e. for two
years with cumulative effect, it would
indisputably mean that the two
increments earned by the employee
was cut off as a measure of penalty for
ever in his upward march of earning
higher scale of pay. In other words the
clock is put back to a lower stage in the
time scale of pay and on expiry of two
years the clock starts working from
that stage afresh. The insidious effect
of the impugned order, by necessary
implication, is that the 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. The words are the skin to the
language which if peeled off its true
colour or its resultant effects would
become apparent.”
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12. After so observing, the Court treated the said
punishment to be a major penalty. In said case while
interpreting clause (V) of Rule 5 of the same regulations,
the Court did not accept the reasoning of the judgment
rendered by the Division Bench of the Punjab and
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Haryana High Court in Sarwan Singh v. State of
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Punjab and Ors.
13. At this juncture, reference to Punjab State &
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Others v. Ram Lubhaya would be apposite. The High
Court has correctly opined as follows:
“Before proceeding further, it will have
to be understood as to what is the effect
of withholding of increments simpilciter,
i.e. without cumulative effect, and with
cumulative effect. For example, if an
employee is getting Rs.100/- at the time
of imposition of penalty of withholding of
increments, and the penalty is without
cumulative effect for a period of two
years and the annual increments were to
be of Rs.5, then in that case for two
years he will continue to get Rs.100 per
month but after the expiry of two years,
he will get at the time of next increment,
Rs.115, including the increment for the
past two years during which period they
remained withheld...”
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14. In Rangnath Rai v. State of Bihar , the Court
while interpreting the withholding of increments with
cumulative effect opined that the increments earned by
an incumbent were cut off as a measure of penalty
forever in his upward march for earning higher scale of
pay. The clock is put back to a lower stage in the time
2
ILR 1985 (2) P&H 193
3
1983 (2) SLR 410
4
1997 (2) PLJR 421
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scale of pay and on expiry of the punishment period the
clock would start working from that stage afresh and,
therefore, the effect of stoppage of increment with
cumulative effect is that the employee is reduced in his
time scale of pay for the period in question and it is in
perpetuity during the rest of the tenure of his service. As
the increments that would have earned for those years
would not be counted in the time scale of pay as a
measure of penalty.
15. The High Court of Delhi in Uttam Kumar v.
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Delhi Jal Board has laid down the same principle and
opined that there is a distinction between the withholding
of increment without cumulative effect and withholding of
increment with cumulative effect. The former is in the
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realm of minor penalty and the later is in the
compartment of major penalty. In the later one, there is
permanent postponement of the increment, whereas in
the former one it is for a specified period to be released
after expiration of the said period.
5
2001 IVAD (Delhi) 166
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16. In our considered opinion the view expressed in
the aforesaid decisions is in consonance with the sound
legal principle and we approve them.
17. Coming to the facts of the present case, it can be
stated with certitude that the trial Court as well as the
High Court has fallen into error by opining that if the
punishment of stoppage of increment without cumulative
effect is imposed for a period of five years, increment is
warranted to be released by the end of the year. It is an
erroneous perception of the nature of punishment. When
there is a stoppage of five annual increments the same
are not paid during the said period and thereafter in the
sixth year the increments are added up to the regular
annual increment. The employee does not get the
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arrears. But if the punishment is not one of stoppage of
increment simpliciter the employee loses the benefit in
perpetuity and after expiry of five years he would start
earning the increment without any addition and it would
start afresh from the first stage because it is a permanent
postponement.
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18. In view of the aforesaid premises, it is clear as
day that the perception of the courts below and the High
Court is absolutely fallacious and therefore, the
judgments and decrees passed by all the courts have to
be annulled and we so do.
19. Consequently, the appeal is allowed, all the
impugned judgments and decrees are set aside and the
suit of the plaintiff stands dismissed. There shall be no
order as to costs.
.............................J.
[Dipak Misra]
.............................J.
[Vikramajit Sen]
New Delhi;
August 29, 2014
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