Holding

The disciplinary authority correctly imposed a single major penalty under the unamended Rules; the amendment is prospective and does not invalidate the punishment.

Summary

The case concerned a disciplinary proceeding against Ch. Gandhi, a senior accountant, who was punished with reversion to junior accountant for two years and postponement of future increments. The question was whether this constituted two major penalties under Rule 9 of the Andhra Pradesh Civil Services (Classification, Control and Appeal) Rules, 1991, and whether the amended rules (effective 6‑12‑2003) could be applied retrospectively to a proceeding initiated under the unamended rules. The Supreme Court held that the proceeding was initiated under the unamended rules, that the amendment was prospective and did not affect vested rights, and that the punishment imposed was a single major penalty permissible under the unamended rule. Consequently, the High Court’s order setting aside the punishment was reversed.

Issues considered

Whether the punishment of reversion with postponement of increments amounts to two major penalties under Rule 9 of the Rules.
Whether the amendment to Rule 9(vii) made on 6‑12‑2003 has retrospective effect on a disciplinary proceeding initiated before that date.
Whether the disciplinary authority erred in imposing the punishment under the unamended Rules.

Legislation cited

Andhra Pradesh Civil Services (Classification, Control and Appeal) Rules, 1991s. Rule 11(27), s. Rule 9(vii)(a), s. Rule 9(vii)(b)
Constitution of Indias. Article 142, s. Article 20(1), s. Article 309
Income Tax Act, 1961s. Section 271(1)(a)
Indian Penal Code, 1860s. Section 420

Subjects

disciplinary proceedingsservice rulesretrospective amendmentmajor penaltyRule 9vetted rightsArticle 309Article 142

Judgment

MANAGER, NATIONAL INSURANCE CO. LTD. v. 19 [2013] 2 S.C.R. 20
SAJU P. PAUL AND ANOTHER [R.M. LODHA, J.]
under the Motor Vehicles Act or any other enactment, can A A THE GOVERNMENT OF ANDHRA PRADESH AND
the Court yet compel it to pay the amount in question giving OTHERS
it liberty to later on recover the same from the owner of the v.
vehicle. CH. GANDHI
(2) Can such a direction be given under Article 142 of the (Civil Appeal No. 1427-1428 of 2013)
Constitution, and what is the scope of Article 142? Does B B FEBRUARY 19, 2013
Article 142 permit the Court to create a liability where there
is none?” [K.S. RADHAKRISHNAN AND DIPAK MISRA, JJ.]
25. The pendency of consideration of the above questions
by a larger Bench does not mean that the course that was SERVICE LAW:
followed in Baljit Kaur5 and Challa Bharathamma6 should not C C
be followed, more so in a peculiar fact situation of this case. In Disciplinary proceedings - Penalty - Disciplinary
the present case, the accident occurred in 1993. At that time, proceedings initiated under unamended rule - Penalty
claimant was 28 years’ old. He is now about 48 years. The imposed in terms of amended rule - Held: In the case at
claimant was a driver on heavy vehicle and due to the accident hand, the disciplinary proceeding was initiated by serving a
he has been rendered permanently disabled. He has not been
D D charge-sheet for the purpose of imposition of a major penalty
able to get compensation so far due to stay order passed by - Employee had no vested right to be imposed a particular
this Court. He cannot be compelled to struggle further for punishment as envisaged under the unamended rules -
recovery of the amount. The insurance company has already Unamended r.9(vii) was only dealing with reduction or
deposited the entire awarded amount pursuant to the order of reversion, but stipulation of postponement of future
this Court passed on 01.08.2011 and the said amount has increments has come by way of amendment - The same
been invested in a fixed deposit account. Having regard to these E E
being a lesser punishment than the maximum, is imposable
peculiar facts of the case in hand, we are satisfied that the and the disciplinary authority has not committed any error by
claimant (Respondent No. 1) may be allowed to withdraw the imposing the said punishment, regard being had to the nature
amount deposited by the insurance company before this Court of charges - It does not violate any Constitutional protection -
along-with accrued interest. The insurance company (appellant) Andhra Pradesh Civil Services (Classification, Control and
thereafter may recover the amount so paid from the owner F F Appeal) Rules, 1991 - r. 9(vii)(b).
(Respondent No. 2 herein). The recovery of the amount by the
insurance company from the owner shall be made by following Service Law - Conditions of service - Amendment -
the procedure as laid down by this Court in the case of Challa Retrospective operaion - Held: There is a presumption
Bharathamma6. against the retrospective operation of a statute - A substituted
26. Appeal is allowed and disposed of as above with no G G provision is the resultant factor of the amendment in the Rules
order as to costs. and it shall guide the consequences that follow from the
amended Rules - In the instant case, the amended Rule
K.K.T. Appeal allowed.
despite having been substituted has no retrospective effect.

H 20
GOVERNMENT OF ANDHRA PRADESH AND ORS. 21 22 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI
Disciplinary proceedings initiated against the A A SCC 625; Tejshree Ghag and Others v. Prakash Parashuram
respondent, a Senior Accountant in the Sub-Treasury, Patil and Others 2007 (7) SCR 214 = 2007 (6) SCC 220; and
culminated in the penalty of his reversion to the post of Marripati Nagaraja and Others v. Government of Andhra
Junior Accountant for two years with the stipulation that Pradesh and Others 2007 (11) SCR 506 = 2007 (11) SCC
there would be postponement of future increments. The 522; Hitendra Vishnu Thakur v. State of Maharashtra and
State Administrative Tribunal upheld the order. The High B B Others 1994 (1) Suppl. SCR 360 = 1994 (4) SCC 602 -
Court set aside the punishment holding that it amounted referred to.
to imposition of two penalties. However, the authorities
were granted liberty to pass appropriate orders keeping Maxwell on the Interpretation of Statute, 12th edition; and
in view the Andhra Pradesh Civil Services (Classification, Francis Bennion's Statutory Interpretation, 2nd Edn. -
Control and Appeal) Rules, 1991. referred to.
C C
In the instant appeals filed by the State Government 1.2 On a perusal of the unamended r.9, there can be
the question for consideration before the Court was: no doubt that clause (vii) only related to reduction to a
whether the punishment could be imposed in accord lower rank in the seniority list or to a lower time scale of
with the amended Rules or under the unamended Rules? pay or in the lower grade or pay not being lower than that
D D to which he was directly recruited. It did not have the
Allowing the appeals, the Court stipulation of postponement of future increment on
restoration to the higher category. After the amendment,
HELD: 1.1 The disciplinary proceedings were r.9 (vii) has been bifurcated into two parts. Under r.
initiated under the unamended Rules. The disciplinary 9(vii)(a), the punishment that is provided is reduction to
authority has imposed the penalty under substituted sub-
E E a lower stage in the time scale of pay for a specified
rule (vii) of r. 9 of the Andhra Pradesh Civil Services period with further directions as to whether or not the
(Classification, Control and Appeal) Rules, 1991. Government servant would earn increments of pay during
However, the amended Rules were not brought to the the period of such reduction and whether on the expiry
notice of the High Court and it has referred to the of such period, the reduction would or would not have
unamended Rules.There is a presumption against the
retrospective operation of a statute, and further a greater F F the effect of postponing the future increments of his pay.
Rule 9(vii)(b) deals with reduction to lower time-scale of
retrospectivity cannot be conferred on a statute than the pay, grade, post or service which shall ordinarily be a bar
language makes it necessary. [para 14, 15, 20 and 26] [32- for promotion with or without further direction regarding
G; 33-A-B; 35-C; 38-C] conditions of restoration to the grade or post or service
Union of India and Others v. K.V. Jankiraman and Others from which the Government servant was reduced and his
G G
1991 (3) SCR 790 =1991 (4) SCC 109; Delhi Development seniority and pay on such restoration to that grade, post
Authority v. H.C. Khurana 1993 (2) SCR 1033 = 1993 (3) SCC or service. [para 17 and 41] [33-G-H; 34-A; 49-D-G]
196; Union of India and Others v. Sangram Keshari Nayak 1.3 In the case at hand, the notification uses the
2007 (9) SCR 177 = 2007 (7) SCC 704; Coal India Ltd. and phraseology that clause (vii) shall be substituted with the
Others v. Saroj Kumar Mishra 2007 (5) SCR 233 = 2007 (9) H H amending clause. The provision which is substituted by
GOVERNMENT OF ANDHRA PRADESH AND ORS. 21 22 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI
Disciplinary proceedings initiated against the A A SCC 625; Tejshree Ghag and Others v. Prakash Parashuram
respondent, a Senior Accountant in the Sub-Treasury, Patil and Others 2007 (7) SCR 214 = 2007 (6) SCC 220; and
culminated in the penalty of his reversion to the post of Marripati Nagaraja and Others v. Government of Andhra
Junior Accountant for two years with the stipulation that Pradesh and Others 2007 (11) SCR 506 = 2007 (11) SCC
there would be postponement of future increments. The 522; Hitendra Vishnu Thakur v. State of Maharashtra and
State Administrative Tribunal upheld the order. The High B B Others 1994 (1) Suppl. SCR 360 = 1994 (4) SCC 602 -
Court set aside the punishment holding that it amounted referred to.
to imposition of two penalties. However, the authorities
were granted liberty to pass appropriate orders keeping Maxwell on the Interpretation of Statute, 12th edition; and
in view the Andhra Pradesh Civil Services (Classification, Francis Bennion's Statutory Interpretation, 2nd Edn. -
Control and Appeal) Rules, 1991. referred to.
C C
In the instant appeals filed by the State Government 1.2 On a perusal of the unamended r.9, there can be
the question for consideration before the Court was: no doubt that clause (vii) only related to reduction to a
whether the punishment could be imposed in accord lower rank in the seniority list or to a lower time scale of
with the amended Rules or under the unamended Rules? pay or in the lower grade or pay not being lower than that
D D to which he was directly recruited. It did not have the
Allowing the appeals, the Court stipulation of postponement of future increment on
restoration to the higher category. After the amendment,
HELD: 1.1 The disciplinary proceedings were r.9 (vii) has been bifurcated into two parts. Under r.
initiated under the unamended Rules. The disciplinary 9(vii)(a), the punishment that is provided is reduction to
authority has imposed the penalty under substituted sub-
E E a lower stage in the time scale of pay for a specified
rule (vii) of r. 9 of the Andhra Pradesh Civil Services period with further directions as to whether or not the
(Classification, Control and Appeal) Rules, 1991. Government servant would earn increments of pay during
However, the amended Rules were not brought to the the period of such reduction and whether on the expiry
notice of the High Court and it has referred to the of such period, the reduction would or would not have
unamended Rules.There is a presumption against the
retrospective operation of a statute, and further a greater F F the effect of postponing the future increments of his pay.
Rule 9(vii)(b) deals with reduction to lower time-scale of
retrospectivity cannot be conferred on a statute than the pay, grade, post or service which shall ordinarily be a bar
language makes it necessary. [para 14, 15, 20 and 26] [32- for promotion with or without further direction regarding
G; 33-A-B; 35-C; 38-C] conditions of restoration to the grade or post or service
Union of India and Others v. K.V. Jankiraman and Others from which the Government servant was reduced and his
G G
1991 (3) SCR 790 =1991 (4) SCC 109; Delhi Development seniority and pay on such restoration to that grade, post
Authority v. H.C. Khurana 1993 (2) SCR 1033 = 1993 (3) SCC or service. [para 17 and 41] [33-G-H; 34-A; 49-D-G]
196; Union of India and Others v. Sangram Keshari Nayak 1.3 In the case at hand, the notification uses the
2007 (9) SCR 177 = 2007 (7) SCC 704; Coal India Ltd. and phraseology that clause (vii) shall be substituted with the
Others v. Saroj Kumar Mishra 2007 (5) SCR 233 = 2007 (9) H H amending clause. The provision which is substituted by
GOVERNMENT OF ANDHRA PRADESH AND ORS. 23 24 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI
the amending Rules, does not obliterate the rights of the A A might have been inflicted under the rule in force at the
parties as if they never existed. A substituted provision time of commission of delinquency or misconduct. [para
is the resultant factor of the amendment in the Rules and 43] [51-A-C]
it shall guide the consequences that follow from the
amended Rules. The amended Rule despite having been Ex-Capt. K.C. Arora and Another v. State of Haryana and
substituted has no retrospective effect. That apart, the Others 1984 (3) SCR 623 = 1984 (3) SCC 281; State of
B B
notification uses the phraseology "shall be substituted" Gujarat v. Raman Lal Keshav Lal Soni 1983 (2) SCR 598 =
which clearly indicates the fact that the amended Rule is 1983 (3) SCC 33; K. Satwant Singh v. The State of Punjab
prospective. [para 27 and 33] [38-D-E; 42-E] 1960 SCR 89 = 1960 AIR 266; Smt. Maya Rani Punj v.
Commissioner of Income-tax, Delhi 1985 (3) Suppl. SCR 827
Government of India and Others v. Indian Tobacco = 1986 AIR 293; Tiwari Kanhaiyalal etc. v. The Commissioner
Association 2005 (2) Suppl. SCR 859 = 2005 (7) SCC 396; C C of Income-tax, Delhi 1975 (3) SCR 927 = 1975 AIR 902 -
Pyare Lal Sharma v. Managing Director and Others 1989 (3) referred to.
SCR 428 = 1989 (3) SCC 448 - relied on.
2.2 It is worth noting that under the unamended rule,
Bhagat Ram Sharma v. Union of India and Others 1988 there were three other categories of punishments,
SCR 1034 = 1988 Suppl. SCC 30; Ritesh Agarwal and D D namely, compulsory retirement, removal from service and
Another v. Securities and Exchange Board of India and Others dismissal from service. The said punishments have been
2008 (8) SCR 553 = 2008 (8) SCC 205; Roshan Lal Tandon maintained in the new rules. In the case at hand, the
v. Union of India and Another 1968 SCR 185 = 1967 AIR disciplinary proceeding was initiated by serving a charge-
1889; Raj Kumar v. Union of India and Others 1975 (3) SCR sheet for the purpose of imposition of a major penalty.
963 = 1975 AIR 1116 - referred to. E E In this backdrop, it would be difficult to say that the
employee had the vested right to be imposed a particular
Senior Superintendent, R.M.S. Cochin and Another v. punishment as envisaged under the unamended rules.
K.V. Gopinath, Sorter 1972 (3) SCR 530 =1972 AIR 1487 - The rule making authority thought it apposite to amend
stands overruled. the rules to introduce a different kind of punishment
"Principles of Statutory Interpretation" by G.P. Singh - F F which is lesser than the maximum punishment or, for that
matter, lesser punishment than that of compulsory
referred to Salmond and Williams on Contracts - referred
retirement from service. Rule 9(vii) was only dealing with
to.
reduction or reversion but issuance of any other direction
2.1 The rules have been framed under Art. 309 of the was not a part of it. It has come by way of amendment.
Constitution. There can be no cavil that by amending the The same being a lesser punishment than the maximum,
G G
rule, a punishment cannot be imposed in respect of is imposable and the disciplinary authority has not
amisconduct or delinquency which was not amisconduct committed any error by imposing the said punishment,
or a ground to proceed in a departmental enquiry before regard being had to the nature of charges. [para 42 and
the amended rules came into force. Further, a person 50] [50-F-G; 54-F-H; 55-A-B]
cannot be subjected to a penalty greater than which
H H
GOVERNMENT OF ANDHRA PRADESH AND ORS. 23 24 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI
the amending Rules, does not obliterate the rights of the A A might have been inflicted under the rule in force at the
parties as if they never existed. A substituted provision time of commission of delinquency or misconduct. [para
is the resultant factor of the amendment in the Rules and 43] [51-A-C]
it shall guide the consequences that follow from the
amended Rules. The amended Rule despite having been Ex-Capt. K.C. Arora and Another v. State of Haryana and
substituted has no retrospective effect. That apart, the Others 1984 (3) SCR 623 = 1984 (3) SCC 281; State of
B B
notification uses the phraseology "shall be substituted" Gujarat v. Raman Lal Keshav Lal Soni 1983 (2) SCR 598 =
which clearly indicates the fact that the amended Rule is 1983 (3) SCC 33; K. Satwant Singh v. The State of Punjab
prospective. [para 27 and 33] [38-D-E; 42-E] 1960 SCR 89 = 1960 AIR 266; Smt. Maya Rani Punj v.
Commissioner of Income-tax, Delhi 1985 (3) Suppl. SCR 827
Government of India and Others v. Indian Tobacco = 1986 AIR 293; Tiwari Kanhaiyalal etc. v. The Commissioner
Association 2005 (2) Suppl. SCR 859 = 2005 (7) SCC 396; C C of Income-tax, Delhi 1975 (3) SCR 927 = 1975 AIR 902 -
Pyare Lal Sharma v. Managing Director and Others 1989 (3) referred to.
SCR 428 = 1989 (3) SCC 448 - relied on.
2.2 It is worth noting that under the unamended rule,
Bhagat Ram Sharma v. Union of India and Others 1988 there were three other categories of punishments,
SCR 1034 = 1988 Suppl. SCC 30; Ritesh Agarwal and D D namely, compulsory retirement, removal from service and
Another v. Securities and Exchange Board of India and Others dismissal from service. The said punishments have been
2008 (8) SCR 553 = 2008 (8) SCC 205; Roshan Lal Tandon maintained in the new rules. In the case at hand, the
v. Union of India and Another 1968 SCR 185 = 1967 AIR disciplinary proceeding was initiated by serving a charge-
1889; Raj Kumar v. Union of India and Others 1975 (3) SCR sheet for the purpose of imposition of a major penalty.
963 = 1975 AIR 1116 - referred to. E E In this backdrop, it would be difficult to say that the
employee had the vested right to be imposed a particular
Senior Superintendent, R.M.S. Cochin and Another v. punishment as envisaged under the unamended rules.
K.V. Gopinath, Sorter 1972 (3) SCR 530 =1972 AIR 1487 - The rule making authority thought it apposite to amend
stands overruled. the rules to introduce a different kind of punishment
"Principles of Statutory Interpretation" by G.P. Singh - F F which is lesser than the maximum punishment or, for that
matter, lesser punishment than that of compulsory
referred to Salmond and Williams on Contracts - referred
retirement from service. Rule 9(vii) was only dealing with
to.
reduction or reversion but issuance of any other direction
2.1 The rules have been framed under Art. 309 of the was not a part of it. It has come by way of amendment.
Constitution. There can be no cavil that by amending the The same being a lesser punishment than the maximum,
G G
rule, a punishment cannot be imposed in respect of is imposable and the disciplinary authority has not
amisconduct or delinquency which was not amisconduct committed any error by imposing the said punishment,
or a ground to proceed in a departmental enquiry before regard being had to the nature of charges. [para 42 and
the amended rules came into force. Further, a person 50] [50-F-G; 54-F-H; 55-A-B]
cannot be subjected to a penalty greater than which
H H
GOVERNMENT OF ANDHRA PRADESH AND ORS. 25 26 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI
2.3 The rule making authority has splitted r. 9(vii) into A A 1975 (3) SCR 963 referred to para 36
two parts - one is harsher than the other, but, both are
less severe than the other punishments, namely, 1972 (3) SCR 530 stands overruled para 36
compulsory retirement, removal from service or 1984 (3) SCR 623 referred to para 37
dismissal. The reason behind it is not to let off one with
simple reduction but to give a direction about the B B 1983 (2) SCR 598 referred to para 37
condition of pay on restoration and also not to impose a 1997(3) Suppl. SCR 63 relied on para 39
harsher punishment which may not be proportionate. The
same really does not affect any vested or accrued right. 1960 SCR 89 referred to para 46
It also does not violate any Constitutional protection.
1985 (3) Suppl. SCR 827 referred to para 47
[para 50] [55-C-D] C C
1975 (3) SCR 927 referred to para 48
2.4 The order passed by the High Court that a double
punishment has been imposed does not withstand CIVIL APPELLATE JURISDICTION : Civil Appeal No.
scrutiny and is set aside and the order of punishment 1427-1428 of 2013.
imposed by the disciplinary authority is restored. [para
51-52] [55-E-F] D D From the Judgment & Orders dated 14.06.2007 of the
High Court of Judicature, Andhra Pradesh at Hyderabad in Writ
Case Law Reference:
Petition No. 12177 of 2007 and dated 08.02.2008 in Review
1993 (2) SCR 1033 referred to para 18 WPMP No. 126152 of 2007 in WP No. 12177 of 2007.

1991 (3) SCR 790 referred to para 19 E E G.N. Reddy for the Appellants.
2007 (9) SCR 177 referred to para 20
R.S. Krishnan, C.S.N. Mohan Rao for the Respondent.
2007 (5) SCR 233 referred to para 20
The Judgment of the Court was delivered by
2007 (7) SCR 214 referred to para 21
F F
DIPAK MISRA, J. 1. Leave granted.
2007 (11) SCR 506 referred to para 22
1994 (1) Suppl. SCR 360 relied on para 25 2. The present appeals by special leave are directed
against the judgment and order dated 14.6.2007 passed by the
1988 SCR 1034 referred to para 27 High Court of Judicature, Andhra Pradesh at Hyderabad in Writ
G G Petition No. 12177 of 2007 and the order dated 8.2.2008
1989 (3) SCR 428 relied on para 28
passed in Review WPMP (SR) No. 126152 of 2007 arising
2008 (8) SCR 553 referred to para 31 from the said writ petition whereby the Division Bench
overturned the order dated 16.5.2007 passed by the Andhra
2005 (2) Suppl. SCR 859 relied on para 32 Pradesh Administrative Tribunal, Hyderabad (for short "the
1968 SCR 185 referred to para 35 H H Tribunal") in O.A. No. 923 of 2006 on the ground that the
GOVERNMENT OF ANDHRA PRADESH AND ORS. 25 26 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI
2.3 The rule making authority has splitted r. 9(vii) into A A 1975 (3) SCR 963 referred to para 36
two parts - one is harsher than the other, but, both are
less severe than the other punishments, namely, 1972 (3) SCR 530 stands overruled para 36
compulsory retirement, removal from service or 1984 (3) SCR 623 referred to para 37
dismissal. The reason behind it is not to let off one with
simple reduction but to give a direction about the B B 1983 (2) SCR 598 referred to para 37
condition of pay on restoration and also not to impose a 1997(3) Suppl. SCR 63 relied on para 39
harsher punishment which may not be proportionate. The
same really does not affect any vested or accrued right. 1960 SCR 89 referred to para 46
It also does not violate any Constitutional protection.
1985 (3) Suppl. SCR 827 referred to para 47
[para 50] [55-C-D] C C
1975 (3) SCR 927 referred to para 48
2.4 The order passed by the High Court that a double
punishment has been imposed does not withstand CIVIL APPELLATE JURISDICTION : Civil Appeal No.
scrutiny and is set aside and the order of punishment 1427-1428 of 2013.
imposed by the disciplinary authority is restored. [para
51-52] [55-E-F] D D From the Judgment & Orders dated 14.06.2007 of the
High Court of Judicature, Andhra Pradesh at Hyderabad in Writ
Case Law Reference:
Petition No. 12177 of 2007 and dated 08.02.2008 in Review
1993 (2) SCR 1033 referred to para 18 WPMP No. 126152 of 2007 in WP No. 12177 of 2007.

1991 (3) SCR 790 referred to para 19 E E G.N. Reddy for the Appellants.
2007 (9) SCR 177 referred to para 20
R.S. Krishnan, C.S.N. Mohan Rao for the Respondent.
2007 (5) SCR 233 referred to para 20
The Judgment of the Court was delivered by
2007 (7) SCR 214 referred to para 21
F F
DIPAK MISRA, J. 1. Leave granted.
2007 (11) SCR 506 referred to para 22
1994 (1) Suppl. SCR 360 relied on para 25 2. The present appeals by special leave are directed
against the judgment and order dated 14.6.2007 passed by the
1988 SCR 1034 referred to para 27 High Court of Judicature, Andhra Pradesh at Hyderabad in Writ
G G Petition No. 12177 of 2007 and the order dated 8.2.2008
1989 (3) SCR 428 relied on para 28
passed in Review WPMP (SR) No. 126152 of 2007 arising
2008 (8) SCR 553 referred to para 31 from the said writ petition whereby the Division Bench
overturned the order dated 16.5.2007 passed by the Andhra
2005 (2) Suppl. SCR 859 relied on para 32 Pradesh Administrative Tribunal, Hyderabad (for short "the
1968 SCR 185 referred to para 35 H H Tribunal") in O.A. No. 923 of 2006 on the ground that the
GOVERNMENT OF ANDHRA PRADESH AND ORS. 27 28 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
disciplinary authority had imposed two major penalties. Be it A A 5. Aggrieved by the said punishment, the respondent
noted, the High Court granted liberty to the department to pass approached the Tribunal in O.A. No. 923 of 2006 and raised
appropriate orders keeping in view the Andhra Pradesh Civil various points assailing the validity of the initiation of the
Services (Classification, Control and Appeal) Rules, 1991 (for proceeding, the manner in which the enquiry was conducted
short "the Rules"). and lastly, that the punishment imposed was disproportionate
B B to the misconduct. The Tribunal referred to the Rule position
3. The facts which are imperative to be adumbrated are
that a disciplinary proceeding under Rule 5 of the Rules was and came to hold that there was no illegality or irregularity in
initiated against the respondent, a Senior Accountant in the the initiation of the disciplinary proceeding, framing of charge
Office of the Sub Treasury, Nakrekal, on the charges that while or conduct of the enquiry and further, regard being had to the
functioning as the senior most Accountant in the said office and gravity of the charge, the punishment could not be treated to
in-charge of the strong room keys, at the time of surprise check C C be disproportionate. Being of this view, the Tribunal dismissed
by the Deputy Director, District Treasury, Nalgonda, he was the original application.
absent and had not signed the attendance register in token of
his having attended the office and also not maintained the 6. The failure before the Tribunal compelled the respondent
movement register as required under the Rules; that he had to invoke the jurisdiction of the High Court which, after adverting
failed to keep the currency chest book in the currency chest and D D
to the facts in detail and the competence of the person who
not endorsed every transaction; that he had passed the bills, had initiated the proceeding by issuing the memorandum of
cheques and challans in token of approval of the payment/ charges, came to hold that the findings recorded by the Tribunal
receipts without signing them; that he had not properly
on the said scores were absolutely defensible and did not
maintained the strong entrants' register which was found
warrant any interference. As far as the imposition of punishment
outside the strong room and further the entries were not E E
was concerned, a contention was advanced that he had been
recorded and signed by him; that he had failed to remain
present at the time of depositing money or withdrawing money imposed two major penalties which were not in consonance
from the currency chest and allowed others to operate the with the Rules. The High Court referred to the order of
currency chest by using the keys of joint custodian; and that he punishment, Rule 9 of the Rules that deals with major penalties
had failed to submit the currency chest slip to R.B.I. on F F and sub-Rule 27 of Rule 11 of the said Rules and came to hold
15.4.2003 in respect of the currency chest transactions of that the penalty imposed by the disciplinary authority did amount
15.4.2003 and also failed to submit the daily sheets of to imposition of two penalties and, accordingly, set aside the
15.4.2003 and 16.4.2003. punishment which had been concurred with by the tribunal and
clarified that the said overturning of the orders would not
4. An Enquiry Officer was appointed to enquire into the
preclude the authorities to pass appropriate orders pertaining
charges and he submitted the report that the charges were G G
to punishment keeping in view the provisions of the Rules.
proven. On the basis of the enquiry report, the disciplinary
authority, after following the requisite procedure, imposed the
7. Calling in question the legal propriety of the said order,
penalty of reversion to the post of Junior Accountant for two
years with the stipulation that there would be postponement of it is urged by Mr. G.N. Reddy, learned counsel for the State and
future increments. H H
GOVERNMENT OF ANDHRA PRADESH AND ORS. 27 28 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
disciplinary authority had imposed two major penalties. Be it A A 5. Aggrieved by the said punishment, the respondent
noted, the High Court granted liberty to the department to pass approached the Tribunal in O.A. No. 923 of 2006 and raised
appropriate orders keeping in view the Andhra Pradesh Civil various points assailing the validity of the initiation of the
Services (Classification, Control and Appeal) Rules, 1991 (for proceeding, the manner in which the enquiry was conducted
short "the Rules"). and lastly, that the punishment imposed was disproportionate
B B to the misconduct. The Tribunal referred to the Rule position
3. The facts which are imperative to be adumbrated are
that a disciplinary proceeding under Rule 5 of the Rules was and came to hold that there was no illegality or irregularity in
initiated against the respondent, a Senior Accountant in the the initiation of the disciplinary proceeding, framing of charge
Office of the Sub Treasury, Nakrekal, on the charges that while or conduct of the enquiry and further, regard being had to the
functioning as the senior most Accountant in the said office and gravity of the charge, the punishment could not be treated to
in-charge of the strong room keys, at the time of surprise check C C be disproportionate. Being of this view, the Tribunal dismissed
by the Deputy Director, District Treasury, Nalgonda, he was the original application.
absent and had not signed the attendance register in token of
his having attended the office and also not maintained the 6. The failure before the Tribunal compelled the respondent
movement register as required under the Rules; that he had to invoke the jurisdiction of the High Court which, after adverting
failed to keep the currency chest book in the currency chest and D D
to the facts in detail and the competence of the person who
not endorsed every transaction; that he had passed the bills, had initiated the proceeding by issuing the memorandum of
cheques and challans in token of approval of the payment/ charges, came to hold that the findings recorded by the Tribunal
receipts without signing them; that he had not properly
on the said scores were absolutely defensible and did not
maintained the strong entrants' register which was found
warrant any interference. As far as the imposition of punishment
outside the strong room and further the entries were not E E
was concerned, a contention was advanced that he had been
recorded and signed by him; that he had failed to remain
present at the time of depositing money or withdrawing money imposed two major penalties which were not in consonance
from the currency chest and allowed others to operate the with the Rules. The High Court referred to the order of
currency chest by using the keys of joint custodian; and that he punishment, Rule 9 of the Rules that deals with major penalties
had failed to submit the currency chest slip to R.B.I. on F F and sub-Rule 27 of Rule 11 of the said Rules and came to hold
15.4.2003 in respect of the currency chest transactions of that the penalty imposed by the disciplinary authority did amount
15.4.2003 and also failed to submit the daily sheets of to imposition of two penalties and, accordingly, set aside the
15.4.2003 and 16.4.2003. punishment which had been concurred with by the tribunal and
clarified that the said overturning of the orders would not
4. An Enquiry Officer was appointed to enquire into the
preclude the authorities to pass appropriate orders pertaining
charges and he submitted the report that the charges were G G
to punishment keeping in view the provisions of the Rules.
proven. On the basis of the enquiry report, the disciplinary
authority, after following the requisite procedure, imposed the
7. Calling in question the legal propriety of the said order,
penalty of reversion to the post of Junior Accountant for two
years with the stipulation that there would be postponement of it is urged by Mr. G.N. Reddy, learned counsel for the State and
future increments. H H
GOVERNMENT OF ANDHRA PRADESH AND ORS. 29 30 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
its functionaries, that the High Court has erroneously opined that A A "substituted" conveys that the Rule has retrospective effect.
two major penalties had been issued in violation of the Rules That apart, it is propounded that even if the rules are not treated
though reversion to the lower post for a period of two years with as retrospective, the appellant had no vested right to be
the stipulation of postponement of future increments on imposed a particular punishment under the unamended Rules.
restoration to higher category does not tantamount to two major
penalties under Rule 9 and, under no circumstances, it B B 10. At the very outset, we may clearly state that we are not
contravenes sub-rule (27) to Rule 11 of the Rules. It is his concerned with the delinquency of the incumbent or the findings
submission that the said punishment, being in consonance with recorded in the disciplinary proceeding that has been
the Rules and further such imposition of punishment not being conducted. We are also not required to address whether the
unknown to service jurisprudence, did not warrant interference competent authority had initiated the departmental proceeding,
by the High Court. The learned counsel further canvassed that C C for the respondent has not assailed the order passed by the
the amended Rules permit imposition of such punishment but Division Bench of the High Court and it is only the State which
the same has not been taken note of by the High Court which has come up in appeal. Thus, the only aspect that requires to
makes the order absolutely vulnerable. be dwelled upon is whether the punishment could be imposed
in accord with the amended Rules or under the unamended
8. Mr. R.S. Krishnan, learned counsel appearing for the Rules.
respondent, resisting the aforesaid proponements, contended D D
that the interpretation placed by the High Court on the Rules 11. It is apt to note here that the punishment was imposed
cannot be found fault with inasmuch as the language employed on 1.12.2005. The relevant part of the order passed by the
in the Rules is absolutely plain, clear and unambiguous and, Director of Treasuries and Accounts is reproduced below: -
on a careful reading of the same, it is manifest that under the
"After a detailed examination of the inquiry report and the
Rules, imposition of two major penalties is not permissible. It E E
explanation of the charged officer, the disciplinary authority
is further urged by him that when the language employed in the
finds that the charges framed against Sri Ch. Gandhi the
Rules has been differently couched and both the employer and
then Senior Accountant and incharge Sub Treasury Officer,
employee are bound by the Rules, what could be
Sub Treasury (non-banking) Nakrekal have been proved.
jurisprudentially permissible need not be adverted to in this
After careful consideration of the material facts and records
case. The learned counsel would further submit that the F F
and explanation of the individual, in exercise of the powers
delinquent employee could not have been imposed such a
conferred under Sub Rule 27(ii) of Rule 11 read with Sub
punishment under Rule 9 of the Rules prior to its amendment
Rule (vii) of rule 9 of A.P.C.S. (C.C.&A) Rules, 1991 hereby
as his case would be governed by the unamended Rules since
awards a punishment of reversion to the lower post of
the disciplinary proceeding was initiated prior to the
junior accountant for two years with effect on postponing
amendment and, at that time, the punishment that was imposed G G
future increments on restoration to the higher category on
was not envisaged.
Sri Ch. Gandhi, presently working as senior Accountant
9. In reply, the learned counsel for the State submitted that with immediate effect."
the respondent would be governed under the new Rules as
12. Regard being had to the nature of the punishment, it
clause (vii) of Rule 9 has been substituted and the term
H H is necessary to scrutinize the Rule position. After the
GOVERNMENT OF ANDHRA PRADESH AND ORS. 29 30 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
its functionaries, that the High Court has erroneously opined that A A "substituted" conveys that the Rule has retrospective effect.
two major penalties had been issued in violation of the Rules That apart, it is propounded that even if the rules are not treated
though reversion to the lower post for a period of two years with as retrospective, the appellant had no vested right to be
the stipulation of postponement of future increments on imposed a particular punishment under the unamended Rules.
restoration to higher category does not tantamount to two major
penalties under Rule 9 and, under no circumstances, it B B 10. At the very outset, we may clearly state that we are not
contravenes sub-rule (27) to Rule 11 of the Rules. It is his concerned with the delinquency of the incumbent or the findings
submission that the said punishment, being in consonance with recorded in the disciplinary proceeding that has been
the Rules and further such imposition of punishment not being conducted. We are also not required to address whether the
unknown to service jurisprudence, did not warrant interference competent authority had initiated the departmental proceeding,
by the High Court. The learned counsel further canvassed that C C for the respondent has not assailed the order passed by the
the amended Rules permit imposition of such punishment but Division Bench of the High Court and it is only the State which
the same has not been taken note of by the High Court which has come up in appeal. Thus, the only aspect that requires to
makes the order absolutely vulnerable. be dwelled upon is whether the punishment could be imposed
in accord with the amended Rules or under the unamended
8. Mr. R.S. Krishnan, learned counsel appearing for the Rules.
respondent, resisting the aforesaid proponements, contended D D
that the interpretation placed by the High Court on the Rules 11. It is apt to note here that the punishment was imposed
cannot be found fault with inasmuch as the language employed on 1.12.2005. The relevant part of the order passed by the
in the Rules is absolutely plain, clear and unambiguous and, Director of Treasuries and Accounts is reproduced below: -
on a careful reading of the same, it is manifest that under the
"After a detailed examination of the inquiry report and the
Rules, imposition of two major penalties is not permissible. It E E
explanation of the charged officer, the disciplinary authority
is further urged by him that when the language employed in the
finds that the charges framed against Sri Ch. Gandhi the
Rules has been differently couched and both the employer and
then Senior Accountant and incharge Sub Treasury Officer,
employee are bound by the Rules, what could be
Sub Treasury (non-banking) Nakrekal have been proved.
jurisprudentially permissible need not be adverted to in this
After careful consideration of the material facts and records
case. The learned counsel would further submit that the F F
and explanation of the individual, in exercise of the powers
delinquent employee could not have been imposed such a
conferred under Sub Rule 27(ii) of Rule 11 read with Sub
punishment under Rule 9 of the Rules prior to its amendment
Rule (vii) of rule 9 of A.P.C.S. (C.C.&A) Rules, 1991 hereby
as his case would be governed by the unamended Rules since
awards a punishment of reversion to the lower post of
the disciplinary proceeding was initiated prior to the
junior accountant for two years with effect on postponing
amendment and, at that time, the punishment that was imposed G G
future increments on restoration to the higher category on
was not envisaged.
Sri Ch. Gandhi, presently working as senior Accountant
9. In reply, the learned counsel for the State submitted that with immediate effect."
the respondent would be governed under the new Rules as
12. Regard being had to the nature of the punishment, it
clause (vii) of Rule 9 has been substituted and the term
H H is necessary to scrutinize the Rule position. After the
GOVERNMENT OF ANDHRA PRADESH AND ORS. 31 32 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
amendment on 6.12.2003, the relevant part of Rule 9 which A A 13. Sub-rule (27) of Rule 11 which has been relied on by
provides for major penalties is as follows: - the High Court reads as follows: -
"Major Penalties "(27) Without prejudice to the foregoing provisions;
(vi) withholding of increments of pay with cumulative (i) every Head of Department may impose on a
effect (G.O.Ms. No. 205, GA (Ser.C) Dept. dt. B B
member of the State Services under his control, the
5.6.98); penalty specified in clause (iii) of rule 9, except in
the case of each member holding a post
(vii) (a) save as provided for a in clause (v)(b),
immediately below his rank; and
reduction to a lower stage in the time scale of pay
for a specified period, with further directions as to C C (ii) every Head of Department declared to be the
whether or not the Government servant will earn appointing authority may impose on a member of
increments of pay during the period of such the State Service holding a post at first level or at
reduction and whether on the expiry of such period, second level under his control, any of the penalties
the reduction will or will not have the effect of specified in clauses (i) to (viii) of rule 9.
postponing the future increments of his pay; D D
(G.O.Ms. No. 428, GA (Ser.C) Dept. dt.
(vii) (b) reduction to lower time-scale of pay, grade, post 13.10.1999)
or service which shall ordinarily be a bar to the
promotion of the Government servant to the time- (iii) The special Chief Secretary and Chief
scale of pay, grade, post or service from which he Commissioner of Land Administration may impose
was reduced, with or without further directions, E E any of the penalties specified in clause (ix) and
regarding conditions of restoration to the grade or clause (x) of rule 9 on Mandal Revenue Officers.
post or service from which the Government servant
(G.O.Ms. No. 231, GA (Ser.C) Dept. dt. 7.6.2005)"
was reduced and his seniority and pay on such
restoration to that grade, post or service; 14. The High Court, relying on sub-rule (27)(ii) of Rule 11,
F F
has expressed the view that the punishments imposed against
(G.O.Ms. No. 373, G.A.(Ser.C) Dept., dt: 6.12.2003)
the respondent, namely, reversion to the lower rank and at the
(viii) compulsory retirement; same time stoppage of increments, come under the purview
of two major penalties as contemplated in Rule 9 of the Rules
(ix) removal from service which shall not be a which is not permissible. On a perusal of the order passed by
disqualification for future employment under the G G the High Court, it is evident that the High Court has referred to
Government; the unamended Rules.
(x) dismissal from service which shall ordinarily be a 15. The Rules were amended on 6.12.2003. Under the
disqualification for future employment under the heading 'minor penalties' after clause (v)(a), clause (v)(b) was
Government." H H added. Under the heading 'major penalties', clause 7 was
GOVERNMENT OF ANDHRA PRADESH AND ORS. 31 32 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
amendment on 6.12.2003, the relevant part of Rule 9 which A A 13. Sub-rule (27) of Rule 11 which has been relied on by
provides for major penalties is as follows: - the High Court reads as follows: -
"Major Penalties "(27) Without prejudice to the foregoing provisions;
(vi) withholding of increments of pay with cumulative (i) every Head of Department may impose on a
effect (G.O.Ms. No. 205, GA (Ser.C) Dept. dt. B B
member of the State Services under his control, the
5.6.98); penalty specified in clause (iii) of rule 9, except in
the case of each member holding a post
(vii) (a) save as provided for a in clause (v)(b),
immediately below his rank; and
reduction to a lower stage in the time scale of pay
for a specified period, with further directions as to C C (ii) every Head of Department declared to be the
whether or not the Government servant will earn appointing authority may impose on a member of
increments of pay during the period of such the State Service holding a post at first level or at
reduction and whether on the expiry of such period, second level under his control, any of the penalties
the reduction will or will not have the effect of specified in clauses (i) to (viii) of rule 9.
postponing the future increments of his pay; D D
(G.O.Ms. No. 428, GA (Ser.C) Dept. dt.
(vii) (b) reduction to lower time-scale of pay, grade, post 13.10.1999)
or service which shall ordinarily be a bar to the
promotion of the Government servant to the time- (iii) The special Chief Secretary and Chief
scale of pay, grade, post or service from which he Commissioner of Land Administration may impose
was reduced, with or without further directions, E E any of the penalties specified in clause (ix) and
regarding conditions of restoration to the grade or clause (x) of rule 9 on Mandal Revenue Officers.
post or service from which the Government servant
(G.O.Ms. No. 231, GA (Ser.C) Dept. dt. 7.6.2005)"
was reduced and his seniority and pay on such
restoration to that grade, post or service; 14. The High Court, relying on sub-rule (27)(ii) of Rule 11,
F F
has expressed the view that the punishments imposed against
(G.O.Ms. No. 373, G.A.(Ser.C) Dept., dt: 6.12.2003)
the respondent, namely, reversion to the lower rank and at the
(viii) compulsory retirement; same time stoppage of increments, come under the purview
of two major penalties as contemplated in Rule 9 of the Rules
(ix) removal from service which shall not be a which is not permissible. On a perusal of the order passed by
disqualification for future employment under the G G the High Court, it is evident that the High Court has referred to
Government; the unamended Rules.
(x) dismissal from service which shall ordinarily be a 15. The Rules were amended on 6.12.2003. Under the
disqualification for future employment under the heading 'minor penalties' after clause (v)(a), clause (v)(b) was
Government." H H added. Under the heading 'major penalties', clause 7 was
GOVERNMENT OF ANDHRA PRADESH AND ORS. 33 34 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
substituted and the said clause was compartmentalized into two A A imposed a punishment under the amended Rules. It is
parts, namely, (vii)(a) and (vii)(b). The disciplinary authority, as necessary to state here that the amended Rules were not
is vivid from the aforequoted portion, has imposed the penalty brought to the notice of the High Court.
under sub-rule (vii) of Rule 9 of the substituted Rule.
18. It is useful to note here that the charge-sheet was
16. Rule 9 of the unamended or the old Rules read as B B issued on 14.11.2003. In Delhi Development Authority v. H.C.
follows: - Khurana1, a two-Judge Bench posed the question relating to
the stage when it can be said that a decision has been taken
"Rule 9: Major Penalties: to initiate the disciplinary proceeding and, in this context,
(vi) withholding of increments of pay with cumulative opined that the decision to initiate disciplinary proceedings
effect. cannot be subsequent to the issuance of the charge-sheet since
C C
issue of the charge-sheet is a consequence of the decision to
(vii) Reduction to a lower rank in the seniority list or to initiate disciplinary proceedings. Framing the charge-sheet is
a lower stage in the seniority list or to a lower stage the first step taken for holding the enquiry into the allegations
in the timescale of pay or to a lower time scale of on the decision taken to initiate disciplinary proceedings. The
pay not being lower than that to which he was charge-sheet is framed on the basis of the allegations made
D D against the government servant; the charge-sheet is then
directly recruited or to lower grade or post not being
lower than that to which he was directly recruited, served on him to enable him to give his explanation; if the
whether in the same service or in another service, explanation is satisfactory, the proceedings are closed,
State or Subordinate; otherwise, an enquiry is held into the charges; if the charges
are not proved, the proceedings are closed and the government
(viii) Compulsory retirement; E E servant exonerated; but if the charges are proved, the penalty
follows. Thus, the service of the charge-sheet on the government
(ix) Removal from service which shall not be a
servant follows the decision to initiate disciplinary proceedings,
disqualification for future employment under the
and it does not precede or coincide with that decision.
Government;
F F 19. Be it noted, in the said case, the decision rendered in
(x) Dismissal from service which shall ordinarily be a
Union of India and Others v. K.V. Jankiraman and Others2 was
disqualification for future employment under the
explained by stating thus: -
Government."
"The word 'issued' used in this context in Jankiraman it is
17. On a perusal of the unamended Rule, there can be no
urged by learned counsel for the respondent, means
doubt that clause (vii) only related to reduction to a lower rank G G service on the employee. We are unable to read
in the seniority list or to a lower time scale of pay or in the lower
Jankiraman in this manner. The context in which the word
grade or pay not being lower than that to which he was directly
'issued' has been used, merely means that the decision
recruited. It did not have the stipulation of postponement of
future increment on restoration to the higher category. Thus, 1. (1993) 3 SCC 196.
the seminal issue is whether the respondent could have been H H 2. (1991) 4 SCC 109.
GOVERNMENT OF ANDHRA PRADESH AND ORS. 33 34 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
substituted and the said clause was compartmentalized into two A A imposed a punishment under the amended Rules. It is
parts, namely, (vii)(a) and (vii)(b). The disciplinary authority, as necessary to state here that the amended Rules were not
is vivid from the aforequoted portion, has imposed the penalty brought to the notice of the High Court.
under sub-rule (vii) of Rule 9 of the substituted Rule.
18. It is useful to note here that the charge-sheet was
16. Rule 9 of the unamended or the old Rules read as B B issued on 14.11.2003. In Delhi Development Authority v. H.C.
follows: - Khurana1, a two-Judge Bench posed the question relating to
the stage when it can be said that a decision has been taken
"Rule 9: Major Penalties: to initiate the disciplinary proceeding and, in this context,
(vi) withholding of increments of pay with cumulative opined that the decision to initiate disciplinary proceedings
effect. cannot be subsequent to the issuance of the charge-sheet since
C C
issue of the charge-sheet is a consequence of the decision to
(vii) Reduction to a lower rank in the seniority list or to initiate disciplinary proceedings. Framing the charge-sheet is
a lower stage in the seniority list or to a lower stage the first step taken for holding the enquiry into the allegations
in the timescale of pay or to a lower time scale of on the decision taken to initiate disciplinary proceedings. The
pay not being lower than that to which he was charge-sheet is framed on the basis of the allegations made
D D against the government servant; the charge-sheet is then
directly recruited or to lower grade or post not being
lower than that to which he was directly recruited, served on him to enable him to give his explanation; if the
whether in the same service or in another service, explanation is satisfactory, the proceedings are closed,
State or Subordinate; otherwise, an enquiry is held into the charges; if the charges
are not proved, the proceedings are closed and the government
(viii) Compulsory retirement; E E servant exonerated; but if the charges are proved, the penalty
follows. Thus, the service of the charge-sheet on the government
(ix) Removal from service which shall not be a
servant follows the decision to initiate disciplinary proceedings,
disqualification for future employment under the
and it does not precede or coincide with that decision.
Government;
F F 19. Be it noted, in the said case, the decision rendered in
(x) Dismissal from service which shall ordinarily be a
Union of India and Others v. K.V. Jankiraman and Others2 was
disqualification for future employment under the
explained by stating thus: -
Government."
"The word 'issued' used in this context in Jankiraman it is
17. On a perusal of the unamended Rule, there can be no
urged by learned counsel for the respondent, means
doubt that clause (vii) only related to reduction to a lower rank G G service on the employee. We are unable to read
in the seniority list or to a lower time scale of pay or in the lower
Jankiraman in this manner. The context in which the word
grade or pay not being lower than that to which he was directly
'issued' has been used, merely means that the decision
recruited. It did not have the stipulation of postponement of
future increment on restoration to the higher category. Thus, 1. (1993) 3 SCC 196.
the seminal issue is whether the respondent could have been H H 2. (1991) 4 SCC 109.
GOVERNMENT OF ANDHRA PRADESH AND ORS. 35 36 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
to initiate disciplinary proceedings is taken and translated A A of the State, unless the same is set aside as being
into action by despatch of the charge-sheet leaving no unconstitutional, the consequences flowing therefrom shall
doubt that the decision had been taken. The contrary view ensue. In such an event, the applicable rule would not be the
would defeat the object by enabling the government servant, rule which was existing but the one which had been validly
if so inclined, to evade service and thereby frustrate the brought on the statute book from an anterior date.
decision and get promotion in spite of that decision." B B
23. Presently, we shall deal with the contention of the
20. In Union of India and Others v. Sangram Keshari learned counsel for the State who has laid emphasis on the fact
Nayak3, it has been held that a departmental proceeding is that the said Rule has been substituted by the amendment
ordinarily said to be initiated when a charge-sheet is issued. dated 16.12.2003 and, therefore, it has to be treated to have
In Coal India Ltd. and Others v. Saroj Kumar Mishra4, similar retrospective effect. At this juncture, we may fruitfully refer to a
view was reiterated. In view of the aforesaid pronouncements, C C passage from Maxwell on the Interpretation of Statute, 12th
there is not an iota of doubt that the disciplinary proceeding was edition, wherein it has been stated thus: -
initiated under the unamended Rules.
"Perhaps no rule of construction is more firmly established
21. At this juncture, we may state with profit that the than thus - 'that a retrospective operation is not to be given
amended Rule has not been given any retrospective effect. In D D to a statute so as to impair an existing right or obligation,
Tejshree Ghag and Others v. Prakash Parashuram Patil and otherwise than as regards matters of procedure, unless
Others5, it has been ruled that the State has the power to alter that effect cannot be avoided without doing violence to the
the terms and conditions of service even with retrospective effect language of the enactment. If the enactment is expressed
by making rules framed under the proviso appended to Article in language which is fairly capable of either interpretation,
309 of the Constitution of India, but it is also well settled that E E it ought to be construed as prospective only'. The rule has,
the rule so made ordinarily should state so expressly. in fact, two aspects, for it, 'involves another and
subordinate rule, to the effect that a statute is not to be
22. In Marripati Nagaraja and Others v. Government of construed so as to have greater retrospective operation
Andhra Pradesh and Others6, this Court has ruled that the State, than its language renders necessary'."
in exercise of its power conferred upon it under the proviso
appended to Article 309 of the Constitution of India, is entitled F F 24. In Francis Bennion's Statutory Interpretation, 2nd Edn.,
to make rules with retrospective effect and retroactive operation. while emphasizing on the concept of retrospective legislation
Ordinarily, in absence of any rule and that too a rule which was and rights, the learned author has stated thus: -
expressly given a retrospective effect, the rules prevailing as on
the date of the notification are to be applied. But if some rule "The essential idea of a legal system is that current law
has been given a retrospective effect which is within the domain G G should govern current activities. Elsewhere in this work a
particular Act is likened to a floodlight switched on or off,
3. (2007) 6 SCC 704. and the general body of law to the circumambient air.
4. (2007) 9 SCC 625. Clumsy though these images are, they show the
5. (2007) 6 SCC 220. inappropriateness of retrospective laws. If we do
6. (2007) 11 SCC 522. H H something today, we feel that the law applying to it should
GOVERNMENT OF ANDHRA PRADESH AND ORS. 35 36 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
to initiate disciplinary proceedings is taken and translated A A of the State, unless the same is set aside as being
into action by despatch of the charge-sheet leaving no unconstitutional, the consequences flowing therefrom shall
doubt that the decision had been taken. The contrary view ensue. In such an event, the applicable rule would not be the
would defeat the object by enabling the government servant, rule which was existing but the one which had been validly
if so inclined, to evade service and thereby frustrate the brought on the statute book from an anterior date.
decision and get promotion in spite of that decision." B B
23. Presently, we shall deal with the contention of the
20. In Union of India and Others v. Sangram Keshari learned counsel for the State who has laid emphasis on the fact
Nayak3, it has been held that a departmental proceeding is that the said Rule has been substituted by the amendment
ordinarily said to be initiated when a charge-sheet is issued. dated 16.12.2003 and, therefore, it has to be treated to have
In Coal India Ltd. and Others v. Saroj Kumar Mishra4, similar retrospective effect. At this juncture, we may fruitfully refer to a
view was reiterated. In view of the aforesaid pronouncements, C C passage from Maxwell on the Interpretation of Statute, 12th
there is not an iota of doubt that the disciplinary proceeding was edition, wherein it has been stated thus: -
initiated under the unamended Rules.
"Perhaps no rule of construction is more firmly established
21. At this juncture, we may state with profit that the than thus - 'that a retrospective operation is not to be given
amended Rule has not been given any retrospective effect. In D D to a statute so as to impair an existing right or obligation,
Tejshree Ghag and Others v. Prakash Parashuram Patil and otherwise than as regards matters of procedure, unless
Others5, it has been ruled that the State has the power to alter that effect cannot be avoided without doing violence to the
the terms and conditions of service even with retrospective effect language of the enactment. If the enactment is expressed
by making rules framed under the proviso appended to Article in language which is fairly capable of either interpretation,
309 of the Constitution of India, but it is also well settled that E E it ought to be construed as prospective only'. The rule has,
the rule so made ordinarily should state so expressly. in fact, two aspects, for it, 'involves another and
subordinate rule, to the effect that a statute is not to be
22. In Marripati Nagaraja and Others v. Government of construed so as to have greater retrospective operation
Andhra Pradesh and Others6, this Court has ruled that the State, than its language renders necessary'."
in exercise of its power conferred upon it under the proviso
appended to Article 309 of the Constitution of India, is entitled F F 24. In Francis Bennion's Statutory Interpretation, 2nd Edn.,
to make rules with retrospective effect and retroactive operation. while emphasizing on the concept of retrospective legislation
Ordinarily, in absence of any rule and that too a rule which was and rights, the learned author has stated thus: -
expressly given a retrospective effect, the rules prevailing as on
the date of the notification are to be applied. But if some rule "The essential idea of a legal system is that current law
has been given a retrospective effect which is within the domain G G should govern current activities. Elsewhere in this work a
particular Act is likened to a floodlight switched on or off,
3. (2007) 6 SCC 704. and the general body of law to the circumambient air.
4. (2007) 9 SCC 625. Clumsy though these images are, they show the
5. (2007) 6 SCC 220. inappropriateness of retrospective laws. If we do
6. (2007) 11 SCC 522. H H something today, we feel that the law applying to it should
GOVERNMENT OF ANDHRA PRADESH AND ORS. 37 38 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
be the law in force today, not tomorrow's backward A A new duties in respect of transactions already
adjustment of it. Such, we believe, is the nature of law. accomplished.
Dislike of ex post facto law is enshrined in the United
States Constitution and in the Constitution of many (v) A statute which not only changes the procedure
American States, which forbid it. The true principle is that but also creates new rights and liabilities shall be
lex prospicit non respicit (law looks forward not back). As construed to be prospective in operation, unless otherwise
B B
Willes, J. said retrospective legislation is 'contrary to the provided, either expressly or by necessary implication."
general principle that legislation by which the conduct of
26. From the aforesaid analysis of law, it is graphically
mankind is to be regulated ought, when introduced for the
clear that there is a presumption against the retrospective
first time, to deal with future acts, and ought not to change
operation of a statute, and further a greater retrospectivity
the character of past transactions carried on upon the faith C C cannot be conferred on a statute than the language makes it
of the then existing law'."
necessary.
25. In Hitendra Vishnu Thakur v. State of Maharashtra
27. In the case at hand, the notification uses the
and Others7, this Court dwelled upon the ambit and sweep of
phraseology that clause (vii) shall be substituted with the
the amending Act and the concept of retrospective effect and,
D D amending clause. The provision which is substituted by the
eventually, ruled thus: -
amending Rules, does not obliterate the rights of the parties
"(i) A statute which affects substantive rights is as if they never existed. A substituted provision is the resultant
presumed to be prospective in operation unless made factor of the amendment in the Rules and it shall guide the
retrospective, either expressly or by necessary consequences that follow from the amended Rules. In Bhagat
intendment, whereas a statute which merely affects Ram Sharma v. Union of India and Others 8, a two-Judge
E E
procedure, unless such a construction is textually Bench, while dealing with the Punjab Public Service
impossible, is presumed to be retrospective in its Commission (Conditions of Service) Regulations, 1958,
application, should not be given an extended meaning and making a distinction between two regulations, opined that in
should be strictly confined to its clearly-defined limits. the absence of any provision giving Regulation 8(3) a
retrospective operation, the same cannot prima facie bear a
(ii) Law relating to forum and limitation is procedural F F greater retroactive effect than intended. In this context, the
in nature, whereas law relating to right of action and right Court proceeded to state as follows: -
of appeal even though remedial is substantive in nature.
"17. It is a matter of legislative practice to provide while
(iii) Every litigant has a vested right in substantive enacting an amending law, that an existing provision shall
law but no such right exists in procedural law. G G be deleted and a new provision substituted. Such deletion
has the effect of repeal of the existing provision. Such a
(iv) A procedural statute should not generally law may also provide for the introduction of a new
speaking be applied retrospectively where the result would provision. There is no real distinction between 'repeal' and
be to create new disabilities or obligations or to impose
7. (1994) 4 SCC 602. H H 8. AIR 1988 SC 740.
GOVERNMENT OF ANDHRA PRADESH AND ORS. 37 38 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
be the law in force today, not tomorrow's backward A A new duties in respect of transactions already
adjustment of it. Such, we believe, is the nature of law. accomplished.
Dislike of ex post facto law is enshrined in the United
States Constitution and in the Constitution of many (v) A statute which not only changes the procedure
American States, which forbid it. The true principle is that but also creates new rights and liabilities shall be
lex prospicit non respicit (law looks forward not back). As construed to be prospective in operation, unless otherwise
B B
Willes, J. said retrospective legislation is 'contrary to the provided, either expressly or by necessary implication."
general principle that legislation by which the conduct of
26. From the aforesaid analysis of law, it is graphically
mankind is to be regulated ought, when introduced for the
clear that there is a presumption against the retrospective
first time, to deal with future acts, and ought not to change
operation of a statute, and further a greater retrospectivity
the character of past transactions carried on upon the faith C C cannot be conferred on a statute than the language makes it
of the then existing law'."
necessary.
25. In Hitendra Vishnu Thakur v. State of Maharashtra
27. In the case at hand, the notification uses the
and Others7, this Court dwelled upon the ambit and sweep of
phraseology that clause (vii) shall be substituted with the
the amending Act and the concept of retrospective effect and,
D D amending clause. The provision which is substituted by the
eventually, ruled thus: -
amending Rules, does not obliterate the rights of the parties
"(i) A statute which affects substantive rights is as if they never existed. A substituted provision is the resultant
presumed to be prospective in operation unless made factor of the amendment in the Rules and it shall guide the
retrospective, either expressly or by necessary consequences that follow from the amended Rules. In Bhagat
intendment, whereas a statute which merely affects Ram Sharma v. Union of India and Others 8, a two-Judge
E E
procedure, unless such a construction is textually Bench, while dealing with the Punjab Public Service
impossible, is presumed to be retrospective in its Commission (Conditions of Service) Regulations, 1958,
application, should not be given an extended meaning and making a distinction between two regulations, opined that in
should be strictly confined to its clearly-defined limits. the absence of any provision giving Regulation 8(3) a
retrospective operation, the same cannot prima facie bear a
(ii) Law relating to forum and limitation is procedural F F greater retroactive effect than intended. In this context, the
in nature, whereas law relating to right of action and right Court proceeded to state as follows: -
of appeal even though remedial is substantive in nature.
"17. It is a matter of legislative practice to provide while
(iii) Every litigant has a vested right in substantive enacting an amending law, that an existing provision shall
law but no such right exists in procedural law. G G be deleted and a new provision substituted. Such deletion
has the effect of repeal of the existing provision. Such a
(iv) A procedural statute should not generally law may also provide for the introduction of a new
speaking be applied retrospectively where the result would provision. There is no real distinction between 'repeal' and
be to create new disabilities or obligations or to impose
7. (1994) 4 SCC 602. H H 8. AIR 1988 SC 740.
GOVERNMENT OF ANDHRA PRADESH AND ORS. 39 40 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
an 'amendment'. In Sutherland's Statutory Construction, A A 18. Amendment is in fact, a wider term and it includes
3rd Edn., Vol 1 at p. 477, the learned author makes the abrogation or deletion of a provision in an existing statute.
following statement of law: If the amendment of an existing law is small, the Act
professes to amend; if it is extensive, it repeals a law and
"The distinction between repeal and amendment as
re-enacts it. An amendment of substantive law is not
these terms are used by the Courts is arbitrary.
B B retrospective unless expressly laid down or by necessary
Naturally the use of these terms by the Court is
implication inferred.
based largely on how the Legislature have
developed and applied these terms in labeling their 19. For the sake of completeness, we wish to add that
enactments. When a section is being added to an mere use of the word 'substitution' does not imply that
Act or a provision added to a section, the Regn. 8(3) must relate back to November 1, 1956, the
Legislatures commonly entitled the Act as an C C
appointed day."
amendment..... When a provision is withdrawn from
a section, the Legislatures call the Act an 28. In Pyare Lal Sharma v. Managing Director and
amendment particularly when a provision is added Others9, the Court was dealing with Regulation 16.14 of Jammu
to replace the one withdrawn. However, when an and Kashmir Industries Employees Service Rules and
entire Act or section is abrogated and no new D D Regulations. Be it noted, the said regulation was amended on
section is added to replace it, Legislatures label the April 21, 1983. In the earlier regulations, certain grounds were
Act accomplishing this result a repeal. Thus as provided for termination of service of a permanent employee.
used by the Legislatures, amendment and repeal In the amended regulation, the ground, namely, unauthorized
may differ in kind - addition as opposed to absence, was added apart from other grounds. The services
withdrawal or only in degree - abrogation of part of E E of the appellants therein were terminated on the ground of
a section as opposed to abrogation of a whole unauthorized absence. The Court scanned the scheme of
section or Act; or more commonly, in both kind and Regulation 16.14 before amendment which consisted of only
degree - addition of a provision to a section to clauses (a) and (b) relating to abolition of post and unfitness
replace a provision being abrogated as opposed on medical ground and the company, the employer therein, had
by abrogation of a whole section of an Act. This F F no authority to terminate the services of an employee on the
arbitrary distinction has been followed by the ground of unauthorised absence without holding disciplinary
Courts, and they have developed separate rules of proceedings against him. The regulation was amended on 20-
construction for each. However, they have 4-1983 and grounds (c) and (d) were added. The amended
recognized that frequently an Act purporting to be regulation could not operate retrospectively but only from the
an amendment has the same qualitative effect as G G date of the amendment. Ground (c) under which action was
a repeal - the abrogation of an existing statutory taken came into existence only on 20-4-1983 and as such, the
provision - and have therefore applied the term period of unauthorised absence which could come within the
'implied repeal' and the rules of construction mischief of ground (c) has to be the period posterior to 20-4-
applicable to repeals to such amendments." 1983 and not anterior to that date.
H H 9. (1989) 3 SCC 448.
GOVERNMENT OF ANDHRA PRADESH AND ORS. 39 40 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
an 'amendment'. In Sutherland's Statutory Construction, A A 18. Amendment is in fact, a wider term and it includes
3rd Edn., Vol 1 at p. 477, the learned author makes the abrogation or deletion of a provision in an existing statute.
following statement of law: If the amendment of an existing law is small, the Act
professes to amend; if it is extensive, it repeals a law and
"The distinction between repeal and amendment as
re-enacts it. An amendment of substantive law is not
these terms are used by the Courts is arbitrary.
B B retrospective unless expressly laid down or by necessary
Naturally the use of these terms by the Court is
implication inferred.
based largely on how the Legislature have
developed and applied these terms in labeling their 19. For the sake of completeness, we wish to add that
enactments. When a section is being added to an mere use of the word 'substitution' does not imply that
Act or a provision added to a section, the Regn. 8(3) must relate back to November 1, 1956, the
Legislatures commonly entitled the Act as an C C
appointed day."
amendment..... When a provision is withdrawn from
a section, the Legislatures call the Act an 28. In Pyare Lal Sharma v. Managing Director and
amendment particularly when a provision is added Others9, the Court was dealing with Regulation 16.14 of Jammu
to replace the one withdrawn. However, when an and Kashmir Industries Employees Service Rules and
entire Act or section is abrogated and no new D D Regulations. Be it noted, the said regulation was amended on
section is added to replace it, Legislatures label the April 21, 1983. In the earlier regulations, certain grounds were
Act accomplishing this result a repeal. Thus as provided for termination of service of a permanent employee.
used by the Legislatures, amendment and repeal In the amended regulation, the ground, namely, unauthorized
may differ in kind - addition as opposed to absence, was added apart from other grounds. The services
withdrawal or only in degree - abrogation of part of E E of the appellants therein were terminated on the ground of
a section as opposed to abrogation of a whole unauthorized absence. The Court scanned the scheme of
section or Act; or more commonly, in both kind and Regulation 16.14 before amendment which consisted of only
degree - addition of a provision to a section to clauses (a) and (b) relating to abolition of post and unfitness
replace a provision being abrogated as opposed on medical ground and the company, the employer therein, had
by abrogation of a whole section of an Act. This F F no authority to terminate the services of an employee on the
arbitrary distinction has been followed by the ground of unauthorised absence without holding disciplinary
Courts, and they have developed separate rules of proceedings against him. The regulation was amended on 20-
construction for each. However, they have 4-1983 and grounds (c) and (d) were added. The amended
recognized that frequently an Act purporting to be regulation could not operate retrospectively but only from the
an amendment has the same qualitative effect as G G date of the amendment. Ground (c) under which action was
a repeal - the abrogation of an existing statutory taken came into existence only on 20-4-1983 and as such, the
provision - and have therefore applied the term period of unauthorised absence which could come within the
'implied repeal' and the rules of construction mischief of ground (c) has to be the period posterior to 20-4-
applicable to repeals to such amendments." 1983 and not anterior to that date.
H H 9. (1989) 3 SCC 448.
GOVERNMENT OF ANDHRA PRADESH AND ORS. 41 42 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
29. After analyzing the facts, the two-Judge Bench A A the penal provisions contained in the said Regulations
expressed as follows:- including Regulations 3 to 6 would not arise."

"The period of absence indicated in the show-cause 32. In this context, we may refer to the observations made
notice is obviously prior to April 20, 1983. The period of in Government of India and Others v. Indian Tobacco
absence prior to the date of amendment cannot be taken Association11 as follows:-
B B
into consideration. When prior to April 20, 1983 the
services of person could not be terminated on the ground "We are not oblivious of the fact that in certain situations,
of unauthorised absence from duty under Regulation 16.14 the court having regard to the purport and object sought
then it is wholly illegal to make the absence during that to be achieved by the legislature may construe the word
period as a ground for terminating the services of Sharma. "substitution" as an "amendment" having a prospective
C C effect but such a question does not arise in the instant
It is basic principle of natural justice that no one can be
penalised on the ground of a conduct which was not penal case."
on the day it was committed." We may also note that in the said case, the Court
[Emphasis supplied] observed that the doctrine of fairness also is to be
D D considered to be a relevant factor for construing the
30. In "Principles of Statutory Interpretation" the learned retrospective operation of a statute.
author, Justice G. P. Singh, while discussing on the said
decision in the context of retrospective operation pertaining to 33. In view of the aforesaid, we have no hesitation in mind
the penal statutes, has stated thus:- that the amended Rule despite having been substituted has
no retrospective effect. That apart, the notification uses the
"This case shows that the rule of construction against E E phraseology "shall be substituted" which clearly indicates the
retroactivity of penal laws is not restricted to Acts providing fact that the amended Rule is prospective.
for criminal offences but applies also to laws which provide
for other penal consequences of a severe nature, e.g. 34. The controversy does not rest there. The learned
termination of service." counsel for the State has urged that even if the Rule is not
F F retrospective, the decision having been taken after the Rules
31. In Ritesh Agarwal and Another v. Securities and have come into force, it is the amended Rule which would be
Exchange Board of India and Others10, the issue was whether applicable. It is propounded by him that there could be
the Regulations that came into force on 25.10.1995 could apply alteration of service conditions by framing the subsequent rule
to a case where the cause of action arose prior thereto. In the or regulation and, hence, the date of the decision is the relevant
aforesaid context, it has been held that :- G G date to attract the applicability of the rule. It is also highlighted
that the respondent, in the obtaining circumstances, had no
"Ex facie, a penal statute will not have any retrospective vested right to be imposed a particular punishment under the
effect or retroactive operation. If commission of fraud was unamended Rules.
complete prior to the said date, the question of invoking
10. (2008) 8 SCC 205. H H 11. (2005) 7 SCC 396.
GOVERNMENT OF ANDHRA PRADESH AND ORS. 41 42 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
29. After analyzing the facts, the two-Judge Bench A A the penal provisions contained in the said Regulations
expressed as follows:- including Regulations 3 to 6 would not arise."

"The period of absence indicated in the show-cause 32. In this context, we may refer to the observations made
notice is obviously prior to April 20, 1983. The period of in Government of India and Others v. Indian Tobacco
absence prior to the date of amendment cannot be taken Association11 as follows:-
B B
into consideration. When prior to April 20, 1983 the
services of person could not be terminated on the ground "We are not oblivious of the fact that in certain situations,
of unauthorised absence from duty under Regulation 16.14 the court having regard to the purport and object sought
then it is wholly illegal to make the absence during that to be achieved by the legislature may construe the word
period as a ground for terminating the services of Sharma. "substitution" as an "amendment" having a prospective
C C effect but such a question does not arise in the instant
It is basic principle of natural justice that no one can be
penalised on the ground of a conduct which was not penal case."
on the day it was committed." We may also note that in the said case, the Court
[Emphasis supplied] observed that the doctrine of fairness also is to be
D D considered to be a relevant factor for construing the
30. In "Principles of Statutory Interpretation" the learned retrospective operation of a statute.
author, Justice G. P. Singh, while discussing on the said
decision in the context of retrospective operation pertaining to 33. In view of the aforesaid, we have no hesitation in mind
the penal statutes, has stated thus:- that the amended Rule despite having been substituted has
no retrospective effect. That apart, the notification uses the
"This case shows that the rule of construction against E E phraseology "shall be substituted" which clearly indicates the
retroactivity of penal laws is not restricted to Acts providing fact that the amended Rule is prospective.
for criminal offences but applies also to laws which provide
for other penal consequences of a severe nature, e.g. 34. The controversy does not rest there. The learned
termination of service." counsel for the State has urged that even if the Rule is not
F F retrospective, the decision having been taken after the Rules
31. In Ritesh Agarwal and Another v. Securities and have come into force, it is the amended Rule which would be
Exchange Board of India and Others10, the issue was whether applicable. It is propounded by him that there could be
the Regulations that came into force on 25.10.1995 could apply alteration of service conditions by framing the subsequent rule
to a case where the cause of action arose prior thereto. In the or regulation and, hence, the date of the decision is the relevant
aforesaid context, it has been held that :- G G date to attract the applicability of the rule. It is also highlighted
that the respondent, in the obtaining circumstances, had no
"Ex facie, a penal statute will not have any retrospective vested right to be imposed a particular punishment under the
effect or retroactive operation. If commission of fraud was unamended Rules.
complete prior to the said date, the question of invoking
10. (2008) 8 SCC 205. H H 11. (2005) 7 SCC 396.
GOVERNMENT OF ANDHRA PRADESH AND ORS. 43 44 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
35. To appreciate the aforesaid stand, we think it apposite A A 36. In Raj Kumar v. Union of India and Others13, the larger
to survey certain authorities in the field. In Roshan Lal Tandon Bench overruled the decision in Senior Superintendent, R.M.S.
v. Union of India and Another12, the Constitution Bench was Cochin and Another v. K.V. Gopinath, Sorter14 and observed
dealing with the contention of the petitioner therein that he had that the rules made under the proviso to Article 309 of the
a contractual right as regards the condition of service Constitution are legislative in character and, therefore, can be
applicable to him at the time he entered Grade 'D' and the B B given effect to retrospectively.
condition of service could not be altered to his disadvantage
afterwards by the notification issued by the Railway Board. 37. In Ex-Capt. K.C. Arora and Another v. State of
Repelling the contention, the Bench held thus: - Haryana and Others15, a notification was issued on August 19,
1976 amending the definition clause of 'military service' in Rule
"It is true that the origin of Government service is 2 of the Rules. The notification was issued with retrospective
contractual. There is an offer and acceptance in every C C
effect from November 1, 1966 and it restricted the benefits of
case. But once appointed to his post or office the military service upto January 10, 1968. A question arose
Government servant acquires a status and his rights and whether the vested rights which had accrued to the petitioner
obligations are no longer determined by consent of both therein in 1969, 1970 and 1971 had been taken away. Dealing
parties, but by statute or statutory rules which may be with the controversy, the three-Judge Bench referred to the
framed and altered unilaterally by the Government. In other D D Constitution Bench decision in State of Gujarat v. Raman Lal
words, the legal position of a Government servant is more Keshav Lal Soni16 and, eventually, pronounced thus: -
one of status than of contract. The hall-mark of status is
the attachment to a legal relationship of rights and duties "In view of this latest pronouncement by the Constitution
imposed by the public law and not by mere agreement of Bench of this Court, the law appears to be well settled and
the parties. The emolument of the Government servant E E the Haryana Government cannot take away the accrued
and his terms of service are governed by statute or rights of the petitioners and the appellants by making
statutory rules which may be unilaterally altered by the amendment of the rules with retrospective effect."
Government without the consent of the employee."
38. In Raman Lal Keshav Lal Soni (supra), the Court had
Thereafter, their Lordships referred to a passage from observed that the amending Act which has been made
F F
Salmond and Williams on Contracts and, eventually, ruled thus:- retrospective to navigate around the obstacles of Article 311
and Article 14 of the Constitution to bring about an artificial
"We are therefore of the opinion that the petitioner has no situation could not be allowed to stand. The Constitution Bench
vested contractual right in regard to the terms of his had posed a question whether a law could be made to destroy
service and that Counsel for the petitioner has been today's accrued constitutional rights by artificially reverting to
unable to make good his submission on this aspect of the G G a situation which existed 17 years before and answered it in
case."
13. AIR 1975 SC 1116.
14. AIR 1972 SC 1487.
15. (1984) 3 SCC 281.
12. AIR 1967 SC 1889.
H H 16. (1983) 2 SCC 33.
GOVERNMENT OF ANDHRA PRADESH AND ORS. 43 44 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
35. To appreciate the aforesaid stand, we think it apposite A A 36. In Raj Kumar v. Union of India and Others13, the larger
to survey certain authorities in the field. In Roshan Lal Tandon Bench overruled the decision in Senior Superintendent, R.M.S.
v. Union of India and Another12, the Constitution Bench was Cochin and Another v. K.V. Gopinath, Sorter14 and observed
dealing with the contention of the petitioner therein that he had that the rules made under the proviso to Article 309 of the
a contractual right as regards the condition of service Constitution are legislative in character and, therefore, can be
applicable to him at the time he entered Grade 'D' and the B B given effect to retrospectively.
condition of service could not be altered to his disadvantage
afterwards by the notification issued by the Railway Board. 37. In Ex-Capt. K.C. Arora and Another v. State of
Repelling the contention, the Bench held thus: - Haryana and Others15, a notification was issued on August 19,
1976 amending the definition clause of 'military service' in Rule
"It is true that the origin of Government service is 2 of the Rules. The notification was issued with retrospective
contractual. There is an offer and acceptance in every C C
effect from November 1, 1966 and it restricted the benefits of
case. But once appointed to his post or office the military service upto January 10, 1968. A question arose
Government servant acquires a status and his rights and whether the vested rights which had accrued to the petitioner
obligations are no longer determined by consent of both therein in 1969, 1970 and 1971 had been taken away. Dealing
parties, but by statute or statutory rules which may be with the controversy, the three-Judge Bench referred to the
framed and altered unilaterally by the Government. In other D D Constitution Bench decision in State of Gujarat v. Raman Lal
words, the legal position of a Government servant is more Keshav Lal Soni16 and, eventually, pronounced thus: -
one of status than of contract. The hall-mark of status is
the attachment to a legal relationship of rights and duties "In view of this latest pronouncement by the Constitution
imposed by the public law and not by mere agreement of Bench of this Court, the law appears to be well settled and
the parties. The emolument of the Government servant E E the Haryana Government cannot take away the accrued
and his terms of service are governed by statute or rights of the petitioners and the appellants by making
statutory rules which may be unilaterally altered by the amendment of the rules with retrospective effect."
Government without the consent of the employee."
38. In Raman Lal Keshav Lal Soni (supra), the Court had
Thereafter, their Lordships referred to a passage from observed that the amending Act which has been made
F F
Salmond and Williams on Contracts and, eventually, ruled thus:- retrospective to navigate around the obstacles of Article 311
and Article 14 of the Constitution to bring about an artificial
"We are therefore of the opinion that the petitioner has no situation could not be allowed to stand. The Constitution Bench
vested contractual right in regard to the terms of his had posed a question whether a law could be made to destroy
service and that Counsel for the petitioner has been today's accrued constitutional rights by artificially reverting to
unable to make good his submission on this aspect of the G G a situation which existed 17 years before and answered it in
case."
13. AIR 1975 SC 1116.
14. AIR 1972 SC 1487.
15. (1984) 3 SCC 281.
12. AIR 1967 SC 1889.
H H 16. (1983) 2 SCC 33.
GOVERNMENT OF ANDHRA PRADESH AND ORS. 45 46 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
the negative. It may be noted with profit that in the said case, A A dealing with the validity of the notification dated 5.12.1988
the Constitution Bench has ruled thus: - issued by the Railway Administration under the proviso to
Article 309 of the Constitution whereby Rule 2544 of the Indian
"The legislature is undoubtedly competent to legislate with Railway Establishment Code, Volume II (Fifth Reprint) had
retrospective effect to take away or impair any vested right been amended with retrospective effect. By virtue of the
acquired under existing laws but since the laws are made B amendment, the quantum of percentage of the running
B
under a written Constitution, and have to conform to the allowance for the purpose of retirement and other benefits was
dos and don'ts of the Constitution, neither prospective nor reduced with effect from 1.1.1973. The notification was
retrospective laws can be made so as to contravene challenged before the Delhi High Court which transferred it to
fundamental rights. The law must satisfy the requirements the Central Administrative Tribunal after coming into force of
of the Constitution today taking into account the accrued the Administrative Tribunals Act, 1985. The Tribunal treated the
C C
or acquired rights of the parties today. The law cannot say, said notification as an executive instruction and opined that the
20 years ago the parties had no right, therefore, the same could not be accepted to be a statutory amendment of
requirements of the Constitution will be satisfied if the law the existing rules governing the running allowance. The said
is dated back by 20 years. We are concerned with today's order was not challenged by the Railway Administration.
rights and not yesterday's. A legislature cannot legislate However, a notification was issued on 5.12.1988, the validity
today with reference to a situation that obtained 20 years D D
of which was challenged in some pending petitions. As various
ago and ignore the march of events and the constitutional Benches of the Tribunal rendered conflicting decisions, the
rights accrued in the course of the 20 years." matter was referred to a larger Bench and the Full Bench of
From the aforesaid Constitution Bench decision, it is the Tribunal opined that though under the proviso to Article 309
graphically clear that a vested right cannot be impaired by of the Constitution the President has power to promulgate rules
E E
bringing a law as that is likely to contravene the Constitutional with retrospective effect, yet it is subject to the condition that
Rights. As stated there, the law is required to satisfy the the rules do not offend any constitutional rights or deprive an
requirements of the Constitution today taking into account the employee of his valuable vested right like pension after
accrued or acquired rights of the parties today. The Bench has retirement as such deprivation of vested right is violative of
emphasized that a legislature cannot legislate today with Article 14 of the Constitution being unreasonable and arbitrary.
F F A three-Judge Bench of this Court referred the matter to the
reference to a situation that obtained 20 years before and
ignore the march of events and the constitutional rights accrued larger Bench by passing the following order: -
in the course of two decades. Thus, vested and accrued rights
"Two questions arise in the present case, viz., (i) what is
are not to be impaired.
the concept of vested or accrued rights so far as the
39. To understand what is precisely meant by vested right G G government servant is concerned, and (ii) whether vested
in the context of a service rule, it is necessary to understand or accrued rights can be taken away with retrospective
and appreciate how this Court has viewed the said right in that effect by rules made under the proviso to Article 309 or
conspectus. The Constitution Bench in Chairman, Railway by an Act made under that article, and which of them and
Board and Others v. C.R. Rangadhamaiah and Others17 was to what extent.
17. (1997) 6 SC 623. H H
GOVERNMENT OF ANDHRA PRADESH AND ORS. 45 46 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
the negative. It may be noted with profit that in the said case, A A dealing with the validity of the notification dated 5.12.1988
the Constitution Bench has ruled thus: - issued by the Railway Administration under the proviso to
Article 309 of the Constitution whereby Rule 2544 of the Indian
"The legislature is undoubtedly competent to legislate with Railway Establishment Code, Volume II (Fifth Reprint) had
retrospective effect to take away or impair any vested right been amended with retrospective effect. By virtue of the
acquired under existing laws but since the laws are made B amendment, the quantum of percentage of the running
B
under a written Constitution, and have to conform to the allowance for the purpose of retirement and other benefits was
dos and don'ts of the Constitution, neither prospective nor reduced with effect from 1.1.1973. The notification was
retrospective laws can be made so as to contravene challenged before the Delhi High Court which transferred it to
fundamental rights. The law must satisfy the requirements the Central Administrative Tribunal after coming into force of
of the Constitution today taking into account the accrued the Administrative Tribunals Act, 1985. The Tribunal treated the
C C
or acquired rights of the parties today. The law cannot say, said notification as an executive instruction and opined that the
20 years ago the parties had no right, therefore, the same could not be accepted to be a statutory amendment of
requirements of the Constitution will be satisfied if the law the existing rules governing the running allowance. The said
is dated back by 20 years. We are concerned with today's order was not challenged by the Railway Administration.
rights and not yesterday's. A legislature cannot legislate However, a notification was issued on 5.12.1988, the validity
today with reference to a situation that obtained 20 years D D
of which was challenged in some pending petitions. As various
ago and ignore the march of events and the constitutional Benches of the Tribunal rendered conflicting decisions, the
rights accrued in the course of the 20 years." matter was referred to a larger Bench and the Full Bench of
From the aforesaid Constitution Bench decision, it is the Tribunal opined that though under the proviso to Article 309
graphically clear that a vested right cannot be impaired by of the Constitution the President has power to promulgate rules
E E
bringing a law as that is likely to contravene the Constitutional with retrospective effect, yet it is subject to the condition that
Rights. As stated there, the law is required to satisfy the the rules do not offend any constitutional rights or deprive an
requirements of the Constitution today taking into account the employee of his valuable vested right like pension after
accrued or acquired rights of the parties today. The Bench has retirement as such deprivation of vested right is violative of
emphasized that a legislature cannot legislate today with Article 14 of the Constitution being unreasonable and arbitrary.
F F A three-Judge Bench of this Court referred the matter to the
reference to a situation that obtained 20 years before and
ignore the march of events and the constitutional rights accrued larger Bench by passing the following order: -
in the course of two decades. Thus, vested and accrued rights
"Two questions arise in the present case, viz., (i) what is
are not to be impaired.
the concept of vested or accrued rights so far as the
39. To understand what is precisely meant by vested right G G government servant is concerned, and (ii) whether vested
in the context of a service rule, it is necessary to understand or accrued rights can be taken away with retrospective
and appreciate how this Court has viewed the said right in that effect by rules made under the proviso to Article 309 or
conspectus. The Constitution Bench in Chairman, Railway by an Act made under that article, and which of them and
Board and Others v. C.R. Rangadhamaiah and Others17 was to what extent.
17. (1997) 6 SC 623. H H
GOVERNMENT OF ANDHRA PRADESH AND ORS. 47 48 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
We find that the Constitution Bench decisions in A A effect of taking away a benefit already available to the
Roshan Lal Tandon v. Union of India18, B.S. Vadera v. employee under the existing rule is arbitrary, discriminatory
Union of India19 and State of Gujarat v. Raman Lal Keshav and violative of the rights guaranteed under Articles 14 and
Lal Soni20 have been sought to be explained by two three- 16 of the Constitution. We are unable to hold that these
Judge Bench decisions in K.C. Arora v. State of Haryana21 decisions are not in consonance with the decisions in
and K. Nagaraj v. State of A.P.22 in addition to the two- B B Roshan Lal Tandon, B.S. Yadav and Raman Lal Keshav
Judge Bench decisions in P.D. Aggarwal v. State of U.P.23 Lal Soni."
and K. Narayanan v. State of Karnataka24. Prima facie,
these explanations go counter to the ratio of the said 40. After so stating, the Constitution Bench stated that in
Constitution Bench decisions. It is not possible for us the said case, the Court was concerned with the pension
sitting as a three-Judge Bench to resolve the said conflict. C payable to the employees after their retirement. It took note of
C the fact that the respondents were no longer in service on the
It has, therefore, become necessary to refer the matter to
a larger Bench. We accordingly refer these appeals to a date of issuance of the impugned notification and the
Bench of five learned Judges." amendments in the rules were not restricted in their application
in futuro. It was further observed that the amendments applied
The Constitution Bench analysed the decisions which have to employees who had already retired and are no longer in
been mentioned in the referral order and observed as follows:- D D service on the date when the notifications were issued. After
referring to the pronouncements in Deokinandan Prasad v.
"24. In many of these decisions the expressions "vested State of Bihar25, D.S. Nakara v. Union of India26 and Indian
rights" or "accrued rights" have been used while striking Ex-Services League v. Union of India27, it has been ruled thus:-
down the impugned provisions which had been given
retrospective operation so as to have an adverse effect in E E "33. Apart from being violative of the rights then available
the matter of promotion, seniority, substantive appointment, under Articles 31(1) and 19(1)(f), the impugned
etc., of the employees. The said expressions have been amendments, insofar as they have been given
used in the context of a right flowing under the relevant rule retrospective operation, are also violative of the rights
which was sought to be altered with effect from an anterior guaranteed under Articles 14 and 16 of the Constitution
date and thereby taking away the benefits available under F F on the ground that they are unreasonable and arbitrary
the rule in force at that time. It has been held that such an since the said amendments in Rule 2544 have the effect
amendment having retrospective operation which has the of reducing the amount of pension that had become
payable to employees who had already retired from
18. AIR 1967 SC 1889. service on the date of issuance of the impugned
19. AIR 1969 SC 118. notifications, as per the provisions contained in Rule 2544
G G
20. (1983) 2 SCC 33. that were in force at the time of their retirement."
21. (1984) 3 SCC 281.
22. (1985) 1 SCC 523. 25. (1971) 2 SCC 330.
23. (1987) 1 SCC 622. 26. (1983) 1 SCC 305.
24. 1994 Supp. (1) SCC 44. 27. (1991) 2 SCC 104.
H H
GOVERNMENT OF ANDHRA PRADESH AND ORS. 47 48 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
We find that the Constitution Bench decisions in A A effect of taking away a benefit already available to the
Roshan Lal Tandon v. Union of India18, B.S. Vadera v. employee under the existing rule is arbitrary, discriminatory
Union of India19 and State of Gujarat v. Raman Lal Keshav and violative of the rights guaranteed under Articles 14 and
Lal Soni20 have been sought to be explained by two three- 16 of the Constitution. We are unable to hold that these
Judge Bench decisions in K.C. Arora v. State of Haryana21 decisions are not in consonance with the decisions in
and K. Nagaraj v. State of A.P.22 in addition to the two- B B Roshan Lal Tandon, B.S. Yadav and Raman Lal Keshav
Judge Bench decisions in P.D. Aggarwal v. State of U.P.23 Lal Soni."
and K. Narayanan v. State of Karnataka24. Prima facie,
these explanations go counter to the ratio of the said 40. After so stating, the Constitution Bench stated that in
Constitution Bench decisions. It is not possible for us the said case, the Court was concerned with the pension
sitting as a three-Judge Bench to resolve the said conflict. C payable to the employees after their retirement. It took note of
C the fact that the respondents were no longer in service on the
It has, therefore, become necessary to refer the matter to
a larger Bench. We accordingly refer these appeals to a date of issuance of the impugned notification and the
Bench of five learned Judges." amendments in the rules were not restricted in their application
in futuro. It was further observed that the amendments applied
The Constitution Bench analysed the decisions which have to employees who had already retired and are no longer in
been mentioned in the referral order and observed as follows:- D D service on the date when the notifications were issued. After
referring to the pronouncements in Deokinandan Prasad v.
"24. In many of these decisions the expressions "vested State of Bihar25, D.S. Nakara v. Union of India26 and Indian
rights" or "accrued rights" have been used while striking Ex-Services League v. Union of India27, it has been ruled thus:-
down the impugned provisions which had been given
retrospective operation so as to have an adverse effect in E E "33. Apart from being violative of the rights then available
the matter of promotion, seniority, substantive appointment, under Articles 31(1) and 19(1)(f), the impugned
etc., of the employees. The said expressions have been amendments, insofar as they have been given
used in the context of a right flowing under the relevant rule retrospective operation, are also violative of the rights
which was sought to be altered with effect from an anterior guaranteed under Articles 14 and 16 of the Constitution
date and thereby taking away the benefits available under F F on the ground that they are unreasonable and arbitrary
the rule in force at that time. It has been held that such an since the said amendments in Rule 2544 have the effect
amendment having retrospective operation which has the of reducing the amount of pension that had become
payable to employees who had already retired from
18. AIR 1967 SC 1889. service on the date of issuance of the impugned
19. AIR 1969 SC 118. notifications, as per the provisions contained in Rule 2544
G G
20. (1983) 2 SCC 33. that were in force at the time of their retirement."
21. (1984) 3 SCC 281.
22. (1985) 1 SCC 523. 25. (1971) 2 SCC 330.
23. (1987) 1 SCC 622. 26. (1983) 1 SCC 305.
24. 1994 Supp. (1) SCC 44. 27. (1991) 2 SCC 104.
H H
GOVERNMENT OF ANDHRA PRADESH AND ORS. 49 50 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
41. We have referred to the aforesaid verdict in detail as A A earn increment of pay during the period of such reduction and
it deals with the vested and accrued right in service whether such reduction will or will not have the effect of
jurisprudence and how the same cannot be affected by postponement in future increments of pay. Rule 9(vii)(b) deals
retrospective amendments. We have already opined that the with reduction to lower timescale of pay and other reductions
amendment to the rules is not retrospective. Therefore, the which we have already stated. There is a distinction between
fulcrum of the controversy is whether the respondent had a B B reduction to a lower stage in the time scale of pay and reduction
vested or accrued right to be visited with a particular to a lower time scale of pay. Needless to say, in clause (vii)(a),
punishment engrafted under Rules 9 of the unamended Rules. there is no provision for reduction to a lower rank or lower grade
As has been held earlier, the disciplinary proceeding had been or post. That is separately provided in clause (vii)(b).
initiated under the unamended rules. Under the unamended rule Whenever there is a reduction to a lower scale in the timescale
9(vii), the punishment provided was reduction to a lower rank C C of pay for a specified period, the employee remains in the said
in the seniority list or to a lower stage in the seniority list or to a post and cadre but the scale of pay is reduced to a lower stage.
lower stage in the timescale of pay or to a lower time scale of Reduction to a lower time scale of pay has more serious
pay not being lower than that to which he was directly recruited impact than the reduction in the stage of pay itself. Reduction
or to lower grade or post not being lower than that to which he to a lower post has a severe consequence. Similarly, reduction
was directly recruited. After the amendment, Rule 9(vii) has in lower rank in the seniority has a different concept.
D D
been bifurcated into two parts. Under Rule 9(vii)(a), the
punishment that is provided is reduction to a lower stage in the 42. Bestowing our thoughtful considerations we find that
time scale of pay for a specified period with further directions as far as the major penalty under Rule 9(vii) is concerned, the
as to whether or not the Government servant would earn rule making authority, under the amended rule, has bifurcated/
increments of pay during the period of such reduction and compartmentalized the punishment into two compartments -
E E one slightly lesser than the other. Under the old rule, there was
whether on the expiry of such period, the reduction would or
would not have the effect of postponing the future increments a singular punishment and there was no stipulation as regards
of his pay. Rule 9(vii)(b) deals with reduction to lower time-scale the earning of increments or imposition of conditions on
of pay, grade, post or service which shall ordinarily be a bar restoration to the grade or post or service concerned. It is worth
for promotion with or without further direction regarding noting that under the unamended rule, there were three other
conditions of restoration to the grade or post or service from F F categories of punishments, namely, compulsory retirement,
which the Government servant was reduced and his seniority removal from service and dismissal from service. The said
and pay on such restoration to that grade, post or service. punishments have been maintained in the new rules. In the case
When both the rules are read in juxtaposition, it is luculent that at hand, the disciplinary proceeding was initiated by serving a
though the earlier Rule 9(vii) provided for reduction to lower charge-sheet for the purpose of imposition of a major penalty
grade or post, yet it did not stipulate imposition of condition on G G and, therefore, the maximum punishment of dismissal could
restoration as regards his seniority and pay to the original grade have been imposed on the respondent.
or post. It is noticeable that after the amendment, Rule 9(vii)(a) 43. The thrust of the matter is whether the respondent could
only provides reduction to a lower stage in the time scale of pay have been imposed punishment under Rule 9(vii) of the
for a specified period and empowers the disciplinary authority unamended rules and no other punishment. The rules have
to issue a direction, if necessary, whether the delinquent would H H
GOVERNMENT OF ANDHRA PRADESH AND ORS. 49 50 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
41. We have referred to the aforesaid verdict in detail as A A earn increment of pay during the period of such reduction and
it deals with the vested and accrued right in service whether such reduction will or will not have the effect of
jurisprudence and how the same cannot be affected by postponement in future increments of pay. Rule 9(vii)(b) deals
retrospective amendments. We have already opined that the with reduction to lower timescale of pay and other reductions
amendment to the rules is not retrospective. Therefore, the which we have already stated. There is a distinction between
fulcrum of the controversy is whether the respondent had a B B reduction to a lower stage in the time scale of pay and reduction
vested or accrued right to be visited with a particular to a lower time scale of pay. Needless to say, in clause (vii)(a),
punishment engrafted under Rules 9 of the unamended Rules. there is no provision for reduction to a lower rank or lower grade
As has been held earlier, the disciplinary proceeding had been or post. That is separately provided in clause (vii)(b).
initiated under the unamended rules. Under the unamended rule Whenever there is a reduction to a lower scale in the timescale
9(vii), the punishment provided was reduction to a lower rank C C of pay for a specified period, the employee remains in the said
in the seniority list or to a lower stage in the seniority list or to a post and cadre but the scale of pay is reduced to a lower stage.
lower stage in the timescale of pay or to a lower time scale of Reduction to a lower time scale of pay has more serious
pay not being lower than that to which he was directly recruited impact than the reduction in the stage of pay itself. Reduction
or to lower grade or post not being lower than that to which he to a lower post has a severe consequence. Similarly, reduction
was directly recruited. After the amendment, Rule 9(vii) has in lower rank in the seniority has a different concept.
D D
been bifurcated into two parts. Under Rule 9(vii)(a), the
punishment that is provided is reduction to a lower stage in the 42. Bestowing our thoughtful considerations we find that
time scale of pay for a specified period with further directions as far as the major penalty under Rule 9(vii) is concerned, the
as to whether or not the Government servant would earn rule making authority, under the amended rule, has bifurcated/
increments of pay during the period of such reduction and compartmentalized the punishment into two compartments -
E E one slightly lesser than the other. Under the old rule, there was
whether on the expiry of such period, the reduction would or
would not have the effect of postponing the future increments a singular punishment and there was no stipulation as regards
of his pay. Rule 9(vii)(b) deals with reduction to lower time-scale the earning of increments or imposition of conditions on
of pay, grade, post or service which shall ordinarily be a bar restoration to the grade or post or service concerned. It is worth
for promotion with or without further direction regarding noting that under the unamended rule, there were three other
conditions of restoration to the grade or post or service from F F categories of punishments, namely, compulsory retirement,
which the Government servant was reduced and his seniority removal from service and dismissal from service. The said
and pay on such restoration to that grade, post or service. punishments have been maintained in the new rules. In the case
When both the rules are read in juxtaposition, it is luculent that at hand, the disciplinary proceeding was initiated by serving a
though the earlier Rule 9(vii) provided for reduction to lower charge-sheet for the purpose of imposition of a major penalty
grade or post, yet it did not stipulate imposition of condition on G G and, therefore, the maximum punishment of dismissal could
restoration as regards his seniority and pay to the original grade have been imposed on the respondent.
or post. It is noticeable that after the amendment, Rule 9(vii)(a) 43. The thrust of the matter is whether the respondent could
only provides reduction to a lower stage in the time scale of pay have been imposed punishment under Rule 9(vii) of the
for a specified period and empowers the disciplinary authority unamended rules and no other punishment. The rules have
to issue a direction, if necessary, whether the delinquent would H H
GOVERNMENT OF ANDHRA PRADESH AND ORS. v. 51 52 SUPREME COURT REPORTS [2013] 2 S.C.R.
CH. GANDHI [DIPAK MISRA, J.]
been framed under Article 309 of the Constitution. There can A A question arose with regard to the penalty imposed under
be no cavil that by amending the rule, a punishment cannot be Section 420 of the Indian Penal Code. At the time of
imposed in respect of a misconduct or delinquency which was occurrence, Section 420 of the Indian Penal Code did not
not a misconduct or a ground to proceed in a departmental provide for minimum sentence of fine. By virtue of an
enquiry before the amended rules came into force. Further, a amendment, imposition of minimum fine became compulsory.
person cannot be subjected to a penalty greater than which B B The Constitution Bench, dealing with the said facet, opined
might have been inflicted under the rule in force at the time of thus:-
commission of delinquency or misconduct.
"In the present case a sentence of imprisonment was, in
44. We have already referred to the decision in Pyare Lal fact, imposed and the total of fines imposed, whether
Sharma (supra) wherein this Court had opined that no one can described as "ordinary" or "compulsory", was not less than
be penalised on the ground of a conduct which was not penal C C the amount of money procured by the appellant by means
on the date it was committed. We have also referred to the of his offence. Under S. 420 of the Indian Penal Code an
view of the learned author, Justice G.P. Singh, in the book, unlimited amount of fine could be imposed. Article 20(1)
"Principles of Statutory Interpretation", wherein he has stated of the Constitution is in two parts. The first part prohibits
that the case of Pyare Lal Sharma (supra) shows that the rule a conviction of any person for any offence except for
of construction against retroactivity of penal laws is not restricted D D violation of law in force at the time of the commission of
to Acts providing for criminal offences but applies also to laws the act charged as an offence. The latter part of the Article
which provide for other penal consequences of a severe nature, prohibited the imposing of a penalty greater than that which
namely, termination of service. In the said case, unauthorized might have been inflicted under the law in force at the time
absence was not a condition for passing an order of of the commission of the offence. The offence with which
termination. The same was incorporated later on. In that E E the appellant had been charged was cheating punishable
backdrop, the view was expressed by this Court in Pyare Lal under S. 420 of the Indian Penal Code which was certainly
Sharma (supra). a law in force at the time of the commission of the offence.
45. Before we proceed to scan the rule position, we would The sentence of imprisonment which was imposed upon
like to refer to certain authorities rendered in the context of the appellant was certainly not greater than that permitted
clause (1) of Article 20 of the Constitution. We are absolutely F F by S. 420. The sentence of fine also was not greater than
conscious that there are certain authorities of this Court wherein that which might have been inflicted under the law which
it has been laid down that Article 20(1) of the Constitution is had been in force at the time of the commission of the
not applicable to civil consequences but only to criminal offence, as a fine unlimited in extent could be imposed
offences. However, by way of analogy, we will be referring to under the section."
certain authorities for the purpose of understanding what G G
47. In Smt. Maya Rani Punj v. Commissioner of Income-
constitutes retrospective penal consequence in its conceptual tax, Delhi29 , a three-Judge Bench was dealing with the
essentiality. provisions of imposition of penalty under the Income-tax Act,
46. In K. Satwant Singh v. The State of Punjab28, the 1961. The question before the Court was that under Section
28. AIR 1960 SC 266. H H 29. AIR 1986 SC 293.
GOVERNMENT OF ANDHRA PRADESH AND ORS. v. 51 52 SUPREME COURT REPORTS [2013] 2 S.C.R.
CH. GANDHI [DIPAK MISRA, J.]
been framed under Article 309 of the Constitution. There can A A question arose with regard to the penalty imposed under
be no cavil that by amending the rule, a punishment cannot be Section 420 of the Indian Penal Code. At the time of
imposed in respect of a misconduct or delinquency which was occurrence, Section 420 of the Indian Penal Code did not
not a misconduct or a ground to proceed in a departmental provide for minimum sentence of fine. By virtue of an
enquiry before the amended rules came into force. Further, a amendment, imposition of minimum fine became compulsory.
person cannot be subjected to a penalty greater than which B B The Constitution Bench, dealing with the said facet, opined
might have been inflicted under the rule in force at the time of thus:-
commission of delinquency or misconduct.
"In the present case a sentence of imprisonment was, in
44. We have already referred to the decision in Pyare Lal fact, imposed and the total of fines imposed, whether
Sharma (supra) wherein this Court had opined that no one can described as "ordinary" or "compulsory", was not less than
be penalised on the ground of a conduct which was not penal C C the amount of money procured by the appellant by means
on the date it was committed. We have also referred to the of his offence. Under S. 420 of the Indian Penal Code an
view of the learned author, Justice G.P. Singh, in the book, unlimited amount of fine could be imposed. Article 20(1)
"Principles of Statutory Interpretation", wherein he has stated of the Constitution is in two parts. The first part prohibits
that the case of Pyare Lal Sharma (supra) shows that the rule a conviction of any person for any offence except for
of construction against retroactivity of penal laws is not restricted D D violation of law in force at the time of the commission of
to Acts providing for criminal offences but applies also to laws the act charged as an offence. The latter part of the Article
which provide for other penal consequences of a severe nature, prohibited the imposing of a penalty greater than that which
namely, termination of service. In the said case, unauthorized might have been inflicted under the law in force at the time
absence was not a condition for passing an order of of the commission of the offence. The offence with which
termination. The same was incorporated later on. In that E E the appellant had been charged was cheating punishable
backdrop, the view was expressed by this Court in Pyare Lal under S. 420 of the Indian Penal Code which was certainly
Sharma (supra). a law in force at the time of the commission of the offence.
45. Before we proceed to scan the rule position, we would The sentence of imprisonment which was imposed upon
like to refer to certain authorities rendered in the context of the appellant was certainly not greater than that permitted
clause (1) of Article 20 of the Constitution. We are absolutely F F by S. 420. The sentence of fine also was not greater than
conscious that there are certain authorities of this Court wherein that which might have been inflicted under the law which
it has been laid down that Article 20(1) of the Constitution is had been in force at the time of the commission of the
not applicable to civil consequences but only to criminal offence, as a fine unlimited in extent could be imposed
offences. However, by way of analogy, we will be referring to under the section."
certain authorities for the purpose of understanding what G G
47. In Smt. Maya Rani Punj v. Commissioner of Income-
constitutes retrospective penal consequence in its conceptual tax, Delhi29 , a three-Judge Bench was dealing with the
essentiality. provisions of imposition of penalty under the Income-tax Act,
46. In K. Satwant Singh v. The State of Punjab28, the 1961. The question before the Court was that under Section
28. AIR 1960 SC 266. H H 29. AIR 1986 SC 293.
GOVERNMENT OF ANDHRA PRADESH AND ORS. 53 54 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
28 of the Income-tax Act, 1922, the upper limit of penalty was A A backdrop of clause (1) of Article 20 of the Constitution, this
provided and there was no prescription of any particular rate Court opined that the punishment provided under the 1961 Act
as confined under Section 271(1)(a) of the 1961 Act. The being greater than the one engrafted under the provisions under
Court observed that the penalty contemplated in the respective the 1922 Act, the appellant therein was not entitled to press into
sections of the two Acts is quasi-criminal in character. the service the second part of clause (1) of Article 20 of the
Reference was made to Article 20(1) of the Constitution and it B B Constitution.
was opined that under the said Article, no person is to be
subjected to a penalty greater than which might have been 49. At this juncture, we may state that an ex post facto law
inflicted under the law in force at the time of commission of the may be retrospective, if it is ameliorative. But in the present
offence. The contention that the penalty should have been levied context, delineation on the said score is not warranted. We
in accordance with Section 28 of the 1922 Act and not under confine our analysis pertaining to the vested or accrued right
C C and imposition of higher punishment that was not permissible
Section 271(1)(a) of the 1961 Act was not accepted by the
Court. The three-Judge Bench referred to the pronouncement at the time of initiation of departmental proceeding.
in K. Satwant Singh (supra) and, eventually, after quoting a
50. In the case at hand, under the unamended rule, there
passage from there, observed as follows: -
were, apart from stoppage of increment with cumulative effect
"It is conceded that under section 28 of the 1922 Act in D D and reduction in rank, grade, post or service, three major
the facts of the case a fine of more than Rs.4,060 (being punishments, namely, compulsory retirement, removal and
within the limit of 1½ times of the tax amount) could have dismissal from service by which there was severance of
been levied. While conceding to that extent, Mr. Dholakia service. The maximum punishment that could have been
submits that the decision of the Constitution Bench of this imposed on an employee after conducting due departmental
Court in Satwant Singh's case requires reconsideration as E E enquiry was dismissal from service. The rule making authority,
it has not taken into account the ratio of an important by way of amendment, has bifurcated the rule 9(vii) into two
decision of the United States Supreme Court in the case parts, namely, 9(vii)(a) and 9(vii)(b). As is evincible, the charge-
of Elbert B. Lindsay v. State of Washington, (1937) 81 sheet only referred to the imposition of major penalty or to be
Law Ed 1182. We are bound by the decision of the dealt with under the said rules relating to major penalty. In this
Constitution Bench. It has held the field for a quarter of a F F backdrop, it would be difficult to say that the employee had the
century without challenge and non-consideration of an vested right to be imposed a particular punishment as
American decision which apparently was not than cited envisaged under the unamended rules. Once the charges have
before this Court does not at all justify the submission at been proven, he could have been imposed the punishment of
the Bar for a reconsideration of the decision of this Court compulsory retirement or removal from service or dismissal
in Satwant Singh's case (AIR 1960 SC 266)." G from service. The rule making authority thought it apposite to
G
amend the rules to introduce a different kind of punishment
48. In Tiwari Kanhaiyalal etc. v. The Commissioner of which is lesser than the maximum punishment or, for that matter,
Income-tax, Delhi30, while dealing with a penal provision under lesser punishment than that of compulsory retirement from
the Income-tax Act, 1922 and Income-tax Act, 1961 in the service. The order of compulsory retirement is a lesser
punishment than dismissal or removal as the pension of a
30. AIR 1975 SC 902. H H
GOVERNMENT OF ANDHRA PRADESH AND ORS. 53 54 SUPREME COURT REPORTS [2013] 2 S.C.R.
v. CH. GANDHI [DIPAK MISRA, J.]
28 of the Income-tax Act, 1922, the upper limit of penalty was A A backdrop of clause (1) of Article 20 of the Constitution, this
provided and there was no prescription of any particular rate Court opined that the punishment provided under the 1961 Act
as confined under Section 271(1)(a) of the 1961 Act. The being greater than the one engrafted under the provisions under
Court observed that the penalty contemplated in the respective the 1922 Act, the appellant therein was not entitled to press into
sections of the two Acts is quasi-criminal in character. the service the second part of clause (1) of Article 20 of the
Reference was made to Article 20(1) of the Constitution and it B B Constitution.
was opined that under the said Article, no person is to be
subjected to a penalty greater than which might have been 49. At this juncture, we may state that an ex post facto law
inflicted under the law in force at the time of commission of the may be retrospective, if it is ameliorative. But in the present
offence. The contention that the penalty should have been levied context, delineation on the said score is not warranted. We
in accordance with Section 28 of the 1922 Act and not under confine our analysis pertaining to the vested or accrued right
C C and imposition of higher punishment that was not permissible
Section 271(1)(a) of the 1961 Act was not accepted by the
Court. The three-Judge Bench referred to the pronouncement at the time of initiation of departmental proceeding.
in K. Satwant Singh (supra) and, eventually, after quoting a
50. In the case at hand, under the unamended rule, there
passage from there, observed as follows: -
were, apart from stoppage of increment with cumulative effect
"It is conceded that under section 28 of the 1922 Act in D D and reduction in rank, grade, post or service, three major
the facts of the case a fine of more than Rs.4,060 (being punishments, namely, compulsory retirement, removal and
within the limit of 1½ times of the tax amount) could have dismissal from service by which there was severance of
been levied. While conceding to that extent, Mr. Dholakia service. The maximum punishment that could have been
submits that the decision of the Constitution Bench of this imposed on an employee after conducting due departmental
Court in Satwant Singh's case requires reconsideration as E E enquiry was dismissal from service. The rule making authority,
it has not taken into account the ratio of an important by way of amendment, has bifurcated the rule 9(vii) into two
decision of the United States Supreme Court in the case parts, namely, 9(vii)(a) and 9(vii)(b). As is evincible, the charge-
of Elbert B. Lindsay v. State of Washington, (1937) 81 sheet only referred to the imposition of major penalty or to be
Law Ed 1182. We are bound by the decision of the dealt with under the said rules relating to major penalty. In this
Constitution Bench. It has held the field for a quarter of a F F backdrop, it would be difficult to say that the employee had the
century without challenge and non-consideration of an vested right to be imposed a particular punishment as
American decision which apparently was not than cited envisaged under the unamended rules. Once the charges have
before this Court does not at all justify the submission at been proven, he could have been imposed the punishment of
the Bar for a reconsideration of the decision of this Court compulsory retirement or removal from service or dismissal
in Satwant Singh's case (AIR 1960 SC 266)." G from service. The rule making authority thought it apposite to
G
amend the rules to introduce a different kind of punishment
48. In Tiwari Kanhaiyalal etc. v. The Commissioner of which is lesser than the maximum punishment or, for that matter,
Income-tax, Delhi30, while dealing with a penal provision under lesser punishment than that of compulsory retirement from
the Income-tax Act, 1922 and Income-tax Act, 1961 in the service. The order of compulsory retirement is a lesser
punishment than dismissal or removal as the pension of a
30. AIR 1975 SC 902. H H
GOVERNMENT OF ANDHRA PRADESH AND ORS. 55 [2013] 2 S.C.R. 56
v. CH. GANDHI [DIPAK MISRA, J.]
compulsorily retired employee, if eligible to get pension under A A SUNIL MEHTA & ANR.
the Pension Rules, is not affected. Rule 9(vii) was only dealing v.
with reduction or reversion but issuance of any other direction STATE OF GUJARAT & ANR.
was not a part of it. It has come by way of amendment. The (Criminal Appeal No. 327 of 2013)
same being a lesser punishment than the maximum, in our
FEBRUARY 20, 2013
considered opinion, is imposable and the disciplinary authority B B
has not committed any error by imposing the said punishment, [T.S. THAKUR AND SUDHANSU JYOTI
regard being had to the nature of charges. It can be looked MUKHOPADHAYA, JJ.]
from another angle. The rule making authority has splitted Rule
9(vii) into two parts - one is harsher than the other, but, both CODE OF CRIMINAL PROCEDURE, 1973:
are less severe than the other punishments, namely, compulsory C C
retirement, removal from service or dismissal. The reason ss. 244 and 246 – Evidence for purposes of framing of
behind it, as we perceive, is not to let off one with simple charge in a complaint case – Plea of complainant that
reduction but to give a direction about the condition of pay on evidence adduced under Chapter XV be treated as evidence
restoration and also not to impose a harsher punishment which for purposes of framing of charge – Held: Is untenable – In a
may not be proportionate. In our view, the same really does D criminal case, using a statement of a witness at the trial,
D
not affect any vested or accrued right. It also does not violate without affording to accused an opportunity to cross-examine,
any Constitutional protection. is tantamount to condemning him unheard – The process
under Chapter XV is conducted in the absence of accused,
51. In view of the aforesaid analysis, the order passed by whereas evidence within the meaning of Evidence Act and
the High Court that a double punishment has been imposed so also within the meaning of s.244, Cr.P.C. is what is
does not withstand scrutiny. E E recorded in the manner stipulated u/s 138 of Evidence Act –
The whole object underlying recording of evidence u/s 244
52. Consequently, the appeals are allowed. The orders
passed by the High Court are set aside and the order of after accused has appeared, is to ensure that not only does
punishment imposed by the disciplinary authority is restored. the accused have opportunity to hear the evidence adduced
against him, but also to defend himself by cross-examining
In the facts and circumstances of the case, there shall be no F F
order as to costs. the witnesses – Evidence Act, 1872 – ss. 3 and 138.

R.P. Appeals allowed. In the instant appeal filed by the accused, the
question for consideration before the Court was: whether
depositions of the complainant and his witnesses
G recorded under Chapter XV of the Code of Criminal
Procedure, 1973 before cognizance was taken by the
Magistrate would constitute evidence for the Magistrate
to frame charges against the accused under Part B of
Chapter XIX of the Code.
H 56