Supreme Court of India

BHAGWAN SHUKLA S/O SH. SARABJIT SHUKLAversusUNION OF INDIA AND ORS.

Citation: 1994 INSC 299
Decided: 5 August 1994
Disposal: Disposed off
Bench: A S ANANDFAIZAN UDDIN

Holding

A retrospective reduction of an employee's basic pay without notice and hearing is invalid as it contravenes natural justice.

Summary

The appellant, a railway employee promoted to Guard, had his basic pay fixed at Rs.190 per month in 1970. In July 1991 the Railway administration issued an order reducing his basic pay to Rs.181 per month, retrospectively effective from 18 December 1970, without issuing a show‑cause notice or granting a hearing. The appellant challenged the order before the Central Administrative Tribunal, which dismissed his petition. The Supreme Court held that such a reduction, which imposes civil consequences, must be preceded by notice and an opportunity to be heard, and the failure to do so violates the principles of natural justice. Consequently, the Court set aside both the Tribunal’s order and the 1991 pay‑reduction order, granting relief to the appellant.

Issues considered

Whether a reduction in a government employee's basic pay with retrospective effect, without a show‑cause notice and hearing, is legally sustainable.
Whether the order violates the principles of natural justice.
Whether the Central Administrative Tribunal erred in dismissing the appellant's petition.

Subjects

service lawrailwaysreduction of payretrospective ordernatural justicenoticehearingadministrative law

Judgment

          BHAGWAN SHUKLA S/0 SH. SARABJIT SHUKLA                              A
                           v.
                UNION OF INDIA AND ORS.

                             AUGUST 5, 1994

              [DR. AS. ANAND AND FAIZAN UDDIN, JJ.]                           B

      Service Law : Railways-Order reducing basic pay with retrospective
effect-No· show cause notice issued-'-Employee suffering civil consequen-
ces-Whether order reducing pay retrospectively without putting the
employee-On notice is legally sustainable.                                    C
      The appellant who had joined the Railways as a Train Clerk, was
promoted as Guard w.e.f. 18.12.1970. His basic pay had been fixed at Rs.
190 p.m. By an order dated 25th July, 1991, the basic pay of the· appellant
was reduced to Rs. 181 p.m. from Rs. 191 p.m., retrospectively w.e.f.
18.12.1970. The appellant questioned the order before the Central Ad-         D
ministrative Tribunal, but was not successful. Hence this appeal.

        Disposing of the matter, this court

      HELD : Fair play in action warrants that ito such order which bas
the effect of an employee suffering civil consequences should be passed       E
without putting the concerned to notice and giving a bearing in the matter.
Since, that was not done the order dated 25.7.91 which was impugned
before the Tribunal could not certainly be sustained. [420·E·F]

        CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5447 of
1994.                                                                         F

      From the Judgment and Order dated 17.9.93 of the Central Ad-
ministrative Tribunal, Patna in 0.A. No. 6 of 1992.

        Manish Mishra and N.S. Bish! for the Appellant.
                                                                              G
    Altaf Ahmed, Additional Solicitor Genral, Arvind K. Sharma,
Hemani Sharma and C.V. Subha Rao for the Respondents.

        The following Order of the Court was delivered :

        Leave granted.                                                        H
                                     419
    420                   SUPREME COURT REPORTS (1994) SUPP. 2 S.C.R.

A         The controversy in this appeal lies in a very narrow compass. The
    appellant who had joined the Railways as a Trains Clerk w.e.f. 18.12.1955
    was promoted as Guard, Grade-C w.e.f. 1812-70 by an order dated
    27.10.1970. The basic pay of the appellant was fixed at Rs. 190 p.m. w.e.f.
    18.12.1955 in a running pay-scale. By an order dated 25th July, 1991, the
    payscale of the appellant, was sought to be refixed and during the refixation
B   his basic pay was reduced to Rs. 181 p.m. from Rs. 190 p.m. w.e.f.
    18.12.1970. The appellant questioned the order reducing his basic pay with
    retrospective effect frorr. 18.12.1970 before the Central Administrative
    Tribunal, Patna Bench. The justification furnished by the respondents for
    reducing the basic pay was that the same had been 'wrongly' fixed initially
    and that the position had continued due to "administrative lapses" for about
c   twenty years, when i< was decided to rectify the mistake. The petition filed
    by the appellant was dismissed by the Tribunal on 17.9.1993.

          We have heard learned counsel for the parties. That the petitioner's
   basic pay had been fixed since 1970 at Rs. 190 p.m. is not disputed. There
D is also no dispute that the basic pay of the appellant was reduced to Rs.
   181 p.m. from Rs. 190 p.m. in 1991 retrospectively w.e.f. 18.12.1970. The
  ·appellant has obviously been visited with civil consequences but he had
   been granted no opportunity to show cause against the reduction of his
   basic pay. He was not. even put on notice before his pay was reduced by
   the department and the order came to be made behind his back without
E following any procedure known to law. There, has, thus, been a flagrant
   violation of the principles of natural justice and the appellant has been
   made to suffer huge financial loss without being heard. Fair play in action
   warrants that no such order which has the effect of an employee suffering
   civil consequences should be passed without putting the concerned to
   notice and giving him a hearing in the matter. Since, that was not done, the
F order (memorandum) dated 25.7.1991, which was impugned before the
   Tribunal could not certainly be sustained and the Central Administrative
   Tribunal fell in error in dismissing the petition of the appellant. The order
   of the Tribunal deserves to be set aside. We, accordingly, accept this appeal
   and set aside the order of the Central Administrative Tribunal dated
G 17.9.1993 as well as the order (memorandum) impugned before the
   Tribunal dated 25.7.1991 reducing the basic pay of the appellant From Rs.
   190 to Rs. 181 w.e.f. 18.12.1970.

           No costs.

    A.G.                                                    Appeal disposed of.

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