Undeclared Cash Without Proof of Malafide or Financial Loss Does Not Warrant Major Penalty of Demotion

The applicant, a Chief Inspector of Tickets (CIT) with 27 years of service, was issued a major penalty charge sheet under Rule 9 of the Railway Servants (Discipline and Appeal) Rules, 1968, following a vigilance check on 10.03.2020

The check found him in possession of ₹3,000 in excess of the ₹900 private cash declared in his EFT Book

The applicant contended the money was for his daughter's birthday gift and he simply forgot to declare it

The Inquiry Officer (IO) found the charges proved, leading the Disciplinary Authority to demote him to the post of Ticket Examiner (two levels lower) for five years with cumulative effect

Appellate and Revisional authorities upheld the findings but the Revisional Authority partially modified/reduced the quantum of punishment, though the applicant remained demoted

1. Whether the inquiry was vitiated by a failure to follow the mandatory procedure under Rule 9(21) of the Discipline & Appeal Rules regarding the examination of the accused on incriminating evidence.

2. Whether the findings of misconduct and the subsequent major penalty were based on substantial evidence or mere conjectures regarding "illegal earnings."

3. Whether the punishment of demotion by two levels was disproportionate to the established lapse of non-declaration of private cash.

The court applied Rule 9 of the Railway Servants (Discipline and Appeal) Rules, 1968, specifically Rule 9(21), which mandates that the Inquiry Officer must question the delinquent on circumstances appearing against him to enable an explanation

It relied on Railway Board Master Circular No. 67, which stipulates that violation of Rule 9(21) is fatal to departmental proceedings

It further considered Railway Board Circular No. 11 of 2017 regarding checking norms and the 08.09.1998 instructions stating that major penalties in vigilance cases typically require proof of financial loss to the Railway or established malafide, fraud, or corruption

The Tribunal found that the Inquiry Officer failed to comply with Rule 9(21), as only two general questions were asked without confronting the applicant with specific incriminating material

Critically, the Tribunal noted that while the applicant failed to declare the cash, the vigilance team admitted they did not check the coaches for irregular passengers, and the passenger charts showed no irregularities

Consequently, the conclusion that the excess cash was "earned" through illegal means was based on conjecture rather than substantial evidence

The Tribunal observed that no financial loss to the Railways was documented, a necessary factor for severe penalties under the 1998 Circular

While the failure to declare cash was a technical violation of rules, the lack of proof of malafide rendered the demotion to a position two levels lower procedurally and substantively flawed

It concluded the penalty was disproportionate in the absence of irrefutable evidence of corruption

The O.A. was disposed of with a direction to the Disciplinary Authority to revisit and review the penalty, reconsidering a punishment commensurate with the actual lapse (non-declaration) rather than the unproven charge of corruption, within two months. No costs were awarded