SOUTH BENGAL STATE TRANSPORT CORPORATIONversusASHOK KUMAR GHOSH AND ORS.

                       [2010) 6 S.C.R. 176


A    SOUTH BENGAL STATE TRANSPORT CORPORATION
                                 v.
              ASHOK KUMAR GHOSH AND ORS.
                (Civil Appeal No. 4338 of 2010)
                             MAY 6, 2010
B
            [R.V. RAVEENDRAN, R.M. LODHA AND
                     C.K. PRASAD, JJ.]

        Service Law:
c
       Misconduct - Penalty - South Bengal State Transport
  Corporation Service Regulations - Regulations 36 and 38 -
  State Transport Corporation - Charges of misconduct against
  respondent Conductor - Findings against him by Disciplinary
0 authority - Respondent relegated to status of Daily Rated
  Conductor- He challenged the action - Plea of bias- Further
  plea that the punishment imposed was not provided for in the
  Regulations - Held: Mere appointment of Enquiry Officer,
  while framing the charge sheet, before considering the reply
E of respondent, did not reflect any bias - However, punishment
  imposed, not being one of the punishments enumerated in
  Regulation 36, not permissible in law - Reinstatement
  directed on technical ground, hence, without back wages -
  Punishment modified to penalty of reduction to lowest stage
  in time scale of pay applicable to Conductors.
F
        Reversion - Held: An employee cannot be reverted to a
    post lower than the post in which he entered service.

        Reversion - Held: Reversion to a post outside the cadre
G i.e. from regular post:o a daily wage post, is not permitted.
          Respondent no.1 was a conductor in the appellant
    transport corporation. Disciplinary proceedings were
    initiated against him for allowing a ticketless passenger

H                                176
  SOUTH BENGAL STATE TRANSPORT CORPN. v.                177
           ASHOK KUMAR GHOSH
to travel in the bus and for possessing excess amount          A
in his cash bag. The disciplinary authority found the
charges proved and inflicted the punishment of
relegating respondent no.1 to the status of a Daily Rated
Conductor.
                                                               B
      Respondent no.1 filed writ petition before the High
Court contending that appointment of the Enquiry Officer
in the charge sheet itself reflected bias on the part of the
authority and this itself vitiated the punishment. The High
Court allowed the writ petition and quashed the order of       C
punishment holding that initiation of disciplinary
proceedings was not free from bias inasmuch as the
Enquiry Officer was appointed without considering the
reply submitted by respondent no.1 and the punishment
inflicted was in violation of Regulation 38(2) of the South
Bengal State Transport Corporation Service Regulations.        D
Hence the present appeal.

    Partly allowing the appeal, the Court

     HELD: 1.1. Regulation 38 of the South Bengal State E
Transport Corporation Service Regulations, inter alia,
provides the procedure for imposing penalties. From a
plain reading of Regulation 38(2), it is evident that the
disciplinary authority is required to draw or cause to be
drawn up, the substance of imputation of misconduct into
definite and distinct articles of charges and the statement F
of imputation of misconduct, to contain the statement of
relevant facts including any admission or confession
made by the employee. It also requires drawing up a list
of documents by which and a list of witnesses by whom .
the articles of charges are proposed to be sustained. , G
Regulation 38(3) of the Regulations obliges the
disciplinary authority to deliver or cause to be delivered
to the employee the articles of charges and the statement
of imputation of misconduct requiring the employee to
submit to the Enquiry Officer written statement of defence H
    178      SUPREME COURT REPORTS             [2010) 6 S.C.R.


A within a period specified. Neither Regulation 38(2) nor
  Regulation 38(3) provides that before the appointment of
  the Enquiry Officer the reply of the delinquent employee
  is to be considered. [Para 11) [185-G-H; 186-A-C)

8       1.2. It may be open for a disciplinary authority to
  initiate the departmental proceedings on consideration of
  the reply of an employee but as an absolute proposition
  of law it cannot be said that before initiating departmental
  enquiry or appointing Enquiry Officer, reply of the
  delinquent employee is required to be obtained and
C considered unless it is the requirement of the rules. There
  may be cases where the charges are of such a nature
  that the disciplinary authority may not require any reply
  from the delinquent employee but straightway initiates the
  departmental enquiry and appoint an Enquiry Officer. In
D the present case, the Bus was checked by the flying
  squad of the appellant-Corporation itself and in view of
  what has been found by it, the disciplinary authority while
  framing the charge had appointed the Enquiry Officer.
  The mere appointment of Enquiry Officer while framing
E the charge sheet, even before considering the reply of the
  delinquent employee, does not reflect any bias. [Para 11)
  [186-C-F]

          State of Punjab vs. V.K. Khanna and others, (2001) 2
F SCC 33, distinguished.

       2.1. In the present case, imposition of penalty was
  found to be bad by the High Court due to non-compliance
  of Regulation 38(2) of Regulations on the ground that the
  delinquent employee was not given any chance to have
G his say before imposition of penalty. However, Regulation
  38(2) nowhere contemplates giving an opportunity to the
  delinquent employee. Matter would have been different
  had the delinquent employee not given the copy of the
  enquiry report and opportunity to file reply thereto. [Para
  13] [187 -B-0]
  SOUTH BENGAL STATE TRANSPORT CORPN. v.                  179
           ASHOK KUMAR GHOSH
     2.2. The punishment inflicted on the delinquent             A
employee is of relegating him to the status of Daily Rated
Conductor from the post of Conductor. The post of
Conductor carries a time scale and Regulation 36(4)
provides for penalty of reduction to a lower stage-in time
scale of pay for a specified period. The reduction to a          B
lower stage in the time scale would obviously mean that
the employee retains the same post but the scale of pay,
which every post carries, can be reduced to a lower
stage. Relegation of the delinquent employee to the
status of Daily Rated Conductor cannot be said to be a           c
reduction to a lower stage in the time scale of pay or
reduction to a lower grade as delinquent employee has
been deprived of the post of Conductor. This reduction
to a lower stage, has to be in the scale of pay of the
Conductor itself. Reduction to a lower grade should be
                                                                 0
with reference to the same post. The punishment inflicted
also does not come within the ambit of reduction to a
lower post or grade as contemplated under Regulation
36(5) of the Regulations. [Para 15] [188-F-H; 189-A]

     3. It is well settled that while an employee can be         E
reverted to a lower post or service, he cannot be reverted
to a post lower than the post in which he entered service.
Further it is also well settled that reversion to a lower post
or service does not permit reversion to a post outside the
cadre that is from regular post to a daily wage post.            F
Therefore in the case at hand, the punishment inflicted
on the delinquent employee (respondent no.1 ), not being
one of the punishments enumerated in Regulation 36, is
not permissible in law. [Para 16] [189-8-D]
                                                                 G
     Nyadar Singh v. Union of India AIR 1988 SC 1979,
relied on.

   4. The High Court was not right in holding that the
enquiry was to be set aside on the ground of bias. The
punishment imposed by the disciplinary authority,                H
    180      SUPREME COURT REPORTS               (2010) 6 S.C.R.


A however, requires to be modified. Though, normally, in
    such a situation the matter should be referred back to the
    disciplinary authority for imposition of fresh penalty,
    having regard to the facts and circumstances and to do
    complete justice, it is directed as follows:- (a) The finding
B - of guilt recorded by the Disciplinary Authority is upheld;
    (b) f;1e punishment imposed by the appellant is set aside
    and the direction for reinstatement is upheld; (c) However
    as the punishment is being set aside and reinstatement
    is directed on a technical ground, the respondent-
C employee will not be entitled to any back wages; (d)
    Instead of reversion to the post of daily wage conductor,
    the punishment is substituted as reduction to the lowest
    stage of the time scale applicable to the post of
    conductor with effect from the date of imposition of
    punishment. [Paras 17, 18) [189-E-H; 190-A-B]
0
                         Case Law Reference:
          (2001) 2 sec 33        distinguished         Para 5
          AIR 1988 SC 1979       relied on             Para 16
E
        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    4338 of 2010.

      From the Judgment & Order dated 24.09.2008 of the High
  Court at Calcutta in MAT No. 567 of 2008 & CAN No. 7375 of
F 2008.

        Janartanjan Das, Swetaketu Mishra, P.P. Nayak for the
    Appellant.

G
          V.K. Monga for the Respondents.

          The Judgment of the Court was delivered by

      C.K. PRASAD, J. 1. This petition for special leave to
  appeal is against the judgment and order dated 24.09.2008,
H passed by the Calcutta High Court in MAT No.567 of 2008,
    SOUTH BENGAL STATE TRANSPORT CORPN. v.                   181
      ASHOK KUMAR GHOSH [C.K. PRASAD, J.]
  whereby it had dismissed the appeal preferred by the petitioner   A
  and affirmed the order of the learned Single Judge dated
  17.04.2008 passed in W.P.No.4100(W) of 2008 quashing the
• order of punishment inflicted on respondent No.1.

      2. Leave granted.                                             B
        3. Short facts giving rise to this appeal are that the writ
  petitioner-respondent No.1, hereinafter referred to as the
  delinquent employee was at the relevant time working as
  Condu9tor with the appellant -South Bengal State Transport
  Corporation. On 17.02.2007 he was assigned duty in a Bus C
  bearing Registration No.WB-39/2110, plying between
  Durgapur to Baharampur. The said bus was checked by the
  checking squad at Baharampur and they detected one
  ticketless passenger, who was going towards Baharampur from
  Kandi. The checking squad collected fine from the said D
  passenger. Further a sum of Rs.345/- was found in excess in,
  the Conductor's cash-bag. The Divisional Manager, Durgapur
  Division of the South Bengal State Transport Corporation is the
  disciplinary authority of the delinquent employee. A memo of
  charge dated 7.3.2007 was drawn by the Divisional Manager, E
  Durgapur alleging the aforesaid misconduct against the
  delinquent employee; i.e. allowing the ticketless passenger to
  travel in the bus and possession of excess amount of Rs.345/
  - in the cash-bag. The memo of charge was served on the
  delinquent employee on 8.3.2007 a_nd without giving any F
  opportunity to him the Divisional Manager, Durgapur was
  appointed as the Enquiry Officer. The delinquent employee
  submitted his reply dated 17.3.2007 denying both the charges
  and according to him detection of the passenger travelling
  without ticket is not misconduct, because on the spot itself the G
  ticketless passenger was tried and a fine was realized from him
  by applying Section 178A of the Motor Vehicles Act. As
   regards the second charge, the plea of the delinquent employee
   is that an amount of Rs.345/- was left by a passenger and when
   one of the passengers claimed the amount, he verified the H
    182       SUPREME COURT REPORTS                   [2010] 6 S.C.R.


A same and till then ke.,t the amount with the intention of returning
  it to him. The enquiry was conducted by the disciplinary
  authority i.e. the Divisional Manager, Durgapur himself who did
  not accept his plea and held both the charges brought against
  him to have been proved. Accordingly the disciplinary authority
B inflicted the punishment and relegated the delinquent employee,
  a Conductor to the status of Daily Rated Conductor.

        4. The delinquent employee challenged the punishment by
  filing the writ petition before the High Court, inter alia,
  contending that "the appointment of an Enquiry Officer in the
C chargesheet itself reflects bias on the part of the authority" and
  this itself vitiates the punishment. The aforesaid submission
  found favour with the High Court and it allowed the writ petition,
  quashed the order of punishment and while doing so observed
  as follows:
D
          "In the present case, there is absolutely not an iota of
          material to indicate that the show-cause/reply submitted by
          the petitioner in response to the charge-sheet was at all
          taken into consideration. Going a step further, it can be
E         said in the present case that appointment of an Enquiring
          Officer while issuing a charge-sheet is undoubtedly an
          unconscious reflection of the sub-conscious mind and this,
          undoubtedly, reflects bias on the part of the authority. Thus,
          there is bias at the very initiation of the enquiry."
F         Ultimately, the High Court concluded as follows :

          "So far as the present case is concerned, in view of the
          fact as indicated earlier that initiation of the proceeding
          was not free from bias and in the backdrop of the fact that
G         there had been non-compliance of Regulation 38(2), this
          court does not find any reason as to why the matter shall
          not be interfered with."

       5. It is relevant here to state that while recording the finding
H of bias, the learned Single Judge had referred to a decision of
 SOUTH BENGAL STATE TRANSPORT CORPN. v.                      183
   ASHOK KUMAR GHOSH [C.K. PRASAD, J.]
this Court in the case of State of Punjab vs. V.K. Khanna and        A
others, (2001) 2 sec 33, in which it has been held as follows:

            "34.The High Court while delving into the issue went
    into the factum of announcement of the Chief Minister in
    regard to appointment of an enquiry officer to substantiate      B
    the frame of mind of the authorities and thus depicting bias
    - what bias means has already been dealt with by us
    earlier in this judgment, as such it does not require any
    further dilation but the factum of announcement has been
    taken note of as an illustration to a mindset viz. the inquiry
    shall proceed irrespective of the reply - is it an indication    C
    of a free and fair attitude towards the officer concerned?
    The answer cannot possibly be in the affirmative. It is well
    settled in service jurisprudence that the authority
    concerned has to apply its mind upon receipt of reply to
    the charge-sheet or show-cause as the case may be, as            D
    to whether a further inquiry is called for. In the event upon
    deliberations and due considerations it is in the affirmative
    - the inquiry follows but not otherwise and it is this part
    of service jurisprudence on which reliance was placed by
    Mr Subramanium and on that score, strongly criticised the        E
    conduct of the respondents (sic appellants) herein and
    accused them of being biased. We do find some
    justification in such a criticism upon consideration of the
    materials on record."
                                                                     F
    6. Another plea of the delinquent employee was that the
punishment relegating him to the status of Daily Rated
Conductor is not provided in the South Bengal State Transport
Corporation Service Regulations (hereinafter referred. to as the
'Regulations') but the said plea had been negated by the High        G
Court in the following words:

    "It cannot be denied that punishment inflicted on the
    petitioner comes within the scope and ambit of Regulation
    36. Punishment imposed is in the nature of reduction to a
    lower post or to a lower stage in time scale."                   H
    184     SUPREME COURT REPORTS                    [2010] 6 S.C.R.


A        7. The appellant, aggrieved by the aforesaid order
    preferred an appeal along with an application for stay. The stay
    application and the appeal were dismissed by a common order
    dated 24.9.2008 with the following directions:

          (a)   The appellant disciplinary authority shall be at liberty
B
                to proceed afresh against the employee strictly in
                accordance with the provisions of Regulation 38(1)
                and 38(2);

          (b)   During the pendency of the proceeding before the
c               disciplinary authority the respondents shall continue
                to enjoy the status enjoyed by him prior to the
                passing of the order of punishment."

       8. Mr. Janaranjan Das, learned counsel appearing on
0 behalf of the appellant-Corporation submits that mere
  appointment of Enquiry Officer while issuing the chargesheet
  does not reflect bias and hence, the finding recorded by the
  High Court that initiation of the departmental proceedings was
  not free from bias is erroneous. He submits that the
E departmental proceeding was conducted in accordance with
  the Regulations and it cannot be said that there had been non-
  compliance of Regulation 38(2) of the Regulations. He further
  submits that reliance on the judgment of this Court in the case
  of V.K. Khanna (supra) is highly misplaced.

F        9. Despite service of notice on respondent No.1, the
    delinquent employee has not chosen to enter appearance.

       10. Regulation 38 of the Regulations, inter alia, provides
  the procedure for imposing penalties. As the High Court had
G held that the appointment of Enquiry Officer without considering
  the reply submitted by the delinquent employee speaks of bias
  and the punishment inflicted is in violation of Regulation 38(2)
  of the Regulations, we deem it expedient to reproduce not only
  Regulation 38(2) but 38(3) which are relevant for the purpose :
H
 SOUTH BENGAL STATE TRANSPORT CORPN. v.                     185
   ASHOK KUMAR GHOSH [C.K. PRASAD, J.]
    38. PROCEDURE FOR IMPOSING PENALTIES :                          A
    (1)     xxx     xxxx          xxxx
    (2) The disciplinary authority shall draw up or cause to be
    drawn up-
                                                                    B
     (i)     The substance of the imputations of misconduct or
             misbehaviour into definite and distinct articles of
             charge,

     (ii)    A statement of imputations of misconduct or            C
             misbehaviour in support of each article of charge
             which shall contain

             (a) statement of relevant facts including any
             admission or confession made by the employee,
                                                                    D
             (b) a list of documents by which, and a list of
             witnesses by whom, the articles of charge are
             proposed to be sustained."

     (3)     The disciplinary authority shall deliver or cause to   E
             be delivered to the employee a copy of the articles
             of charge and the statement of imputations of
             misconduct or misbehaviour prepared under clause
             (ii) of sub-regulation (2) and shall require the
             employee to submit to the inquiring authority within
             such time as may be specified a written statement      F
             of his defence and to state whether he desires to
             be heard in person.

     (4)     xxx       xxxx       xxxx
                                                                    G
     11. From a plain reading of Regulation 38(2) it is evident
that the disciplinary authority is required to draw or cause to
be drawn up, the substance of imputation of misconduct into
definite and distinct articles of charges and the statement of
imputation of misconduct, to contain the statement of relevant      H   .
    186       SUPREME COURT REPORTS                   [2010] 6 S.C.R.


A facts including any admission or confession made by the
  employee. It also requires drawing up a list of documents by
  which and a list of witnesses by whom the articles of charges
  are proposed to be sustained. Regulation 38(3) of the
  Regulations obliges the disciplinary authority to deliver or cause
B to be delivered to the employee the articles of charges and the
  statement of imputation of misconduct requiring the employee
  to submit to the Enquiry Officer written statement of defence
  within a period specified. Neither Regulation 38(2) nor
  Regulation 38(3) provides that before the appointment of the
c Enquiry Officer the reply of the delinquent employee is to be
  considered. In our opinion, it may be open for a disciplinary
  authority to initiate the departmental proceedings on
  consideration of the reply of an employee but as an absolute
  proposition of law it cannot be said that before initiating
  departmental enquiry or appointing Enquiry Officer, reply of the
0
  delinquent employee is required to be obtained and
  considered unless it is the requirement of the rules. There may
  be cases where the charges are of such a nature that the
  disciplinary authority may not require any reply from the
E delinquent employee but straightway initiates the departmental
  enquiry and appoint an Enquiry Officer. In the present case the
  Bus was checked by the flying squad of the appellant-
  Corporation itself and in view-0f what has been found by it, the
  disciplinary authority while framing the charge had ap('ointed
  the Enquiry Officer. We are of the opinior ." · ~;re
F appointment of Enquiry Officer while framing the cha; J'- ~:ieet,
  even before considering the reply of the delinquent employee,
  does not reflect any bias.

          12. Now, referring to the authority of this Court in the case
G of V.K. Khanna (supra), relied on by the High Court, same is
  clearly distinguishable. In the said case the chargesheet dated
  24.4.1997 was issued to the delinquent employee who
  happened to be the Chief Secretary of the State and he was
  asked to submit his reply within 21 days but even before his
H reply, the Chief Minister made a statement on 27.4.1997 that
  SOUTH BENGAL STATE TRANSPORT CORPN. v.                       187
    ASHOK KUMAR GHOSH [C.K. PRASAD, J.]
a judge of the High Court would look into the charge against           A
him. The aforesaid act of the Chief Minister coupled with other
factors led this Court to conclude that the action was actuated
by bias. In the present case the facts are completely different.

     13. It is relevant here to state that imposition of penalty was   8
found to be bad by the High Court due to non-compliance of
Regulation 38(2) of Regulations on the ground that the
delinquent employee was not given any chance to have his say
before imposition of penalty. Regulation 38(2) of the
Regulations has been quoted in the preceding paragraph of the          C
judgment and nowhere it contemplates giving an opportunity to
the delinquent employee. Matter would have been different had
the delinquent employee not given the copy of the enquiry report
and opportunity to file reply thereto. Thus, both the reasons given
by the learned Single Judge, as affirmed in the appeal by the
 High Court, are erroneous.                                            D

     14. It may be mentioned that the High Court had held that
punishment inflicted on the delinquent employee to be one
provided under Regulation 36 of the Regulations. According to
the High Court punishment imposed is in the nature of reduction        E
of lower post or to a lower stage in time scale. Regulation 36
provides for the penalties which can be imposed on delinquent
employee. Regulation 36 reads as follows :

     "36.PENALTIES : The following penalties may, for good
                                                                       F
     or sufficient reasons and as hereinafter provided, be
     imposed on an employee namely :

      (i)     Censure;

      (ii)    with-holding of increments or promotions;                G
      (iii)   recovery from pay of the whole or part of any
              pecuniary loss caused to the Corporation by
              negligence or breach of orders;

       (iv)   reduction to a lower stage in time scale of pay for      H
    188     SUPREME COURT REPORTS                    [2010) 6 S.C.R.


A                a specified period with further direction as to
                 whether or not the employee will earn increments
                 of pay during the period of such reduction will or will
                 not have the effect of postponing the future
                 increments of his pay;
B
          (v)    reduction to a lower time scale of pay, grade, post
                 or service which shall ordinarily be a bar to the
                 promotion of the employee to the time scale of pay,
                 grade, post or service from which he was reduced,
                 with or without further directions regarding
c                conditions of the restoration to the grade or post of
                 service from which the employee was reduced and
                 his seniority and pay on such restoration to that
                 grade, post or service;

D         (vi)   compulsory retirement;

          (vii) removal from service which shall not be a
                disqualification for future employment;

          (viii) dismissal from service which shall ordinarily be a
E                disqualification for future employment."

        15. The punishment inflicted on the delinquent employee
  is of relegating him to the status of Daily Rated Conductor from
  the post of Conductor. The post of Conductor carries a time
F scale and Regulation 36(4) provides for penalty of reduction to
  a lower stage in time scale of pay for a specified period. The
  reduction to a lower stage in the time scale would obviously
  mean that the employee retains the same post but the scale of
  pay, which every post carries, can be reduced to a lower stage.
G Relegation of the delinquent employee to the status of Daily
  Rated Conductor cannot be said to be a reduction to a lower
  stage in the time scale of pay or reduction to a lower grade as
  delinquent employee has been deprived of the post of
  Conductor. This reduction to a lower stage, in our opinion, has
H to be in the scale of pay of the Conductor itself. Reduction to a
   SOUTH BENGAL STATE TRANSPORT CORPN. v.                       189
     ASHOK KUMAR GHOSH [C.K. PRASAD, J.]
lower grade should be with reference to the same post. In our           A
opinion, the punishment inflicted also does not come within the
ambit of reduction to a lower post or grade as contemplated
under Regulation 36(5) of the Regulations.

       16. We may next consider whether the punishment is               8
· permissible in service jurisprudence. It is well settled that while
  an employee can be reverted to a lower post or service, he
  cannot be reverted to a post lower than the post in which he
  entered service (See: Nyadar Singh vs. Union of India ..., AIR
  1988 SC 1979). Further it is also well settled that reversion to      C
  a fower post or service does not permit reversion to a post
  outside the cadre that is from regular post to a daily wage post.
  We are therefore of the view that the punishment inflicted on
  the delinquent employee not being one of the Punishments
  enumerated in Regulation 36, is not permissible in law.

      17. However we are of the view that the reasoning of the
 High Court for quashing the order of punishment is not
 sustainable. While we do not agree with tl'ie High Court that the
 enquiry is to be set aside on the ground of bias, we agree that
 the punishment imposed by the disciplinary authority requires          E
                                              a
 to be modified. Though, normally, in such situation the matter
 should be referred back to the disciplinary authority for
 imposition of fresh penalty, having regard to the facts and
 circumstances and to do complete justice, we propose to
 impose the penalty.                                                    F

      18. We accordingly allow this appeal in part with the
 following directions:                         ' ·

      (a) The judgment of the High Court is set aside and the
      finding of guilt recorded by the Disciplinary Authority is        G
      upheld.

      (b) The punishment imposed by the appellant is set aside
      and the direction for reinstatement is upheld. ,

      (c) However as the punishment is being set'aside and              H
    190       SUPREME COURT REPORTS                  [2010) 6 S.C.R.


A         reinstatement is directed on a technical ground, the
          respondent-employee will not be ·:mtitled to any back
          wages.

          (d) Instead of reversion to the post of daily wage conductor
          we substitute the punishment as reduction to the lowest
B
          stage of the time scale applicable to the post of conductor
          with effect from the date of imposition of punishment.

    B.B.B.                                    Appeal partly allowed.