PUNJAB STATE ELECTRICITY BOARD NOW PUNJAB STATE POWER CORPORATION LTD.versusRAJ KUMAR GOEL

                   [2014] 12 S.C.R. 171

 PUNJAB STATE ELECTRICITY BOARD NOW PUNJAB                   A
       STATE POWER CORPORATION LTD.
                            v.
                    RAJ KUMAR GOEL
             (Civil Appeal No. 8366 of 2014)
                                                             B
                    AUGUST 29, 2014
      [DIPAK MISRA AND VIKRAMAJIT SEN, JJ.]

    Service Law:
                                                             c
     Disciplinary proceedings - Punishment of stoppage of
five increments without cumulative effect - Held: In such
punishment, annual increments would not be paid during the
period and in the sixth year are to be added up to regular
annual increment.                                            D
    Allowing the appeal, the Court
      HELD: 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 E
up to the regular annual increment. The employee does
not get the 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 F
and it would start afresh from the first stage because it
 is a permanent postponement. It cannot be said 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. [Para 17] G
 [178-A-C]

   Ku/want Singh Gill v. State of Punjab 1990 (1) Suppl.
SCR 426 : 1991 Supp(1) SCC 504 - relied on.

                            171                              H
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A       Punjab State and Ors. v. Ram Lubhaya 1983 (2) SLR
    410; Ranganath Rai v. State of Bihar 1997 (2) PLJR 421;
    Uttam Kumar v. Delhi Jal Board 2001 IVAD (Delhi) 166 -
    approved.

B      Sarwan Singh v. State of Punjab and Ors. ILR 1985 (2)
    P&H 193 - refered to.

                         Case Law Reference:
     1990 (1) Suppl. SCR 426          relied on         Para 11
c    ILR 1985 (2) P&H 193             referred to       Para 12
     1983 (2) SLR 410                 approved          Para 14
     2001 IVAD (Delhi) 166            approved          Para 15
D       CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    8366 of 2014.

      From the Judgment and order dated 25.07.2013 in
  Regular Second Appeal No. 796 of 2012 passed by the High
E Court of Punjab & Haryana at Chandigarh.

         Jayant K. Sud, Chirag Khurana, Jaikirty, Vikash Singh for
    the appellant.

      S. Janani, Deepak Goel, Sunando Raha for the
F respondent.             ·

          The Judgment of the Court was delivered by

          DIPAK MISRA, J. 1. Leave granted.

G     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 RS.A. No. 796 of 2012 whereby the High Court
  has affirmed the judgment and decree passed by the Courts
H below.
     PSEB NOW PSPC LTD. v. RAJ KUMAR GOEL                      173
               [DIPAK MISRA, J.]
      3. The broad essential facts which are to be stated for          A
 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,      B
 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             c
 cumulative effect and further the period 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       D
  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 that the effect of
· stoppage of five increments without cumulative effect should
  mean that the Board shall release each year's increment before       E
  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.
                                                                       F
       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       G
 years 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            H
    174       SUPREME COURT REPORTS                  [2014] 12 S.C.R.

A   declaration to the effect whether the defendants wrongly and
    illegally had implemented order No. 329 dated 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
8
  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
C 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
D         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
E         present case and it is only guidance to this Court how to
          interpret the words and phrases as enshrined in rules.
          Certainly this Court h·as 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
F         Court of India, nor brought to the notice of this Court. 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."
G
        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.
H
     PSEB NOW PSPC LTD. v. RAJ KUMAR GOEL                  175
               [DIPAK MISRA, J.]
      9. Being dissatisfied with the dismissal of appeal the      A
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 increments of the respondent, which is against the     B
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.        c
    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 D
 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 E
 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
 regard, we may refer with profit to the decision in Ku/want F
 Singh Gill v. State of Punjab1 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 G
 compartment of major punishment. Proceeding further the two
 Judge Bench stated thus:

      "But when penalty was imposed withholding two

1.   1991 Supp(1) sec 504.                                        H
    176       SUPREME COURT REPORTS                 (2014] 12 S.C.R.


A         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
B         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
c         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."
D        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 Haryana High Court in Sarwan Singh
E v. State of Punjab and Ors2•
         13. At this juncture, reference to Punjab State & Others
    v. Ram Lubhaya 3 would be apposite. The High Court has
    correctly opined as follows:
F
          "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
G         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

    2.   ILR 1985 (2) P&H 193.
H 3.     1983 (2) SLR 410.
     PSEB NOW PSPC LTD. v. RAJ KUMAR GOEL                       177
               [DIPAK MISRA, J.]
      continue to get Rs.100 per month but after the expiry of         A
      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 ... "

      14. In Rangnath Rai v. State of Bihar4, the Court while          B
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 scale of pay and on expiry of the punishment
period the clock would start working from that stage afresh and,       C
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          D
of pay as a measure of penalty.

      15. The High Court of Delhi in Uttam Kumar v. Delhi Jal
Boari:P has laid down the same principle and opined that there
is a distinction between the withholding of increment without          E
cumulative effect and withholding of increment with cumulative
effect. The former is in the 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           F
expiration of the said period.

     16. In our considered opinion the view expressed in the
aforesaid decisions is in consonance with the sound legal
principle and we approve them.
                                                                       G
     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

4.   1997 (2) PLJR 421.
5.   2001 IV AD (Delhi) 166.                                           H


                                                                           .,
    178       SUPREME COURT REPORTS              [2014] 12 S.C.R.


A 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
B 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
  arrears. But if the punishment is not one of stoppage of
  increment simpliciter the employee loses the benefit in
c 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.

          18. In view of the aforesaid premises, it is clear as day
  that the perception of the courts below and the High Court is
D 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
E stands dismissed. There shall be no order as to costs.

    Kalpana K. Tripathy                              Appeal allowed.