IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE TWENTY SIXTH DAY OF DECEMBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION NO : 12602 of 1999 Between: G. Sudhakar Kumar S/o late G. Ramachander Rao A.P. Industrial Infrastructure Corpn. Ltd., 4th Floor, Parishrama Bhavan, R/o Hyderabad ..... PETITIONER AND A.P. Industrial Infrastructure Corpn. Ltd., rep. by Chairman & Managing Director Parishrama Bhavan, 6th Floor, Basheer Bagh, Hyderabad .....RESPONDENT Counsel for the Petitioner : MR.ABHINAND KUMAR SHAVILI Counsel for the Respondent: MR.K.V.SIMHADRI The Court made the following: ORDER: This Writ Petition is filed for a writ of Certiorari to quash order, dated 24.12.1998, whereby the penalty of stoppage of three increments with cumulative effect has been imposed on the petitioner. Heard Sri Abhinand Kumar Shavili, learned counsel for the petitioner, and Sri K.V.Simhadri, learned Standing Counsel for the respondent. The petitioner, at the relevant time, was the Zonal Manager of the respondent-Corporation. An Enquiry Officer was appointed to look into the allegations made against the petitioner with regard to execution of a work between 13.06.1996 and 01.07.1997 by a contractor and payment of bills to him to the extent of Rs.27,742.63 paise under L.S.II and part. On 17.07.1998, the Executive Director (Finance) of the Corporation issued memorandum of charges and the petitioner was directed to submit his explanation to the said charges. Accordingly, the petitioner submitted his explanation. Purporting to consider the said explanation, the Chairman and Managing Director of the Corporation passed the impugned order, whereby the above- mentioned penalty of stoppage of three increments with cumulative effect has been imposed on the petitioner. This order is questioned in this Writ Petition. At the hearing, learned counsel for the petitioner submitted that the penalty of stoppage of three increments with cumulative effect cannot be treated as a minor penalty, and therefore, such a penalty could not have been imposed on the petitioner by the respondent, without holding an enquiry. In support of his contention, learned counsel relied on the judgment of the Supreme Court in Kulwant Singh Gill v. State of Punjab[1]. Learned Standing Counsel submitted that under Rule 27(3) of the Conduct, Discipline and Appeals Regulations, 1974 (for short ‘the Regulations’) withholding of increments or promotions was included under the head “minor penalties” at the relevant time when punishment was imposed on the petitioner, and therefore, there was no need for holding an enquiry. In Kulwant Singh Gill (supra), a rule in Punjab Civil Services (Punishment and Appeal) Rules, which is identical to the Regulations in the present case to the extent of withholding of increments or promotions, fell for consideration of the Apex Court. While rejecting the contention advanced on behalf of State of Punjab that withholding of increments having been included under the head “minor penalties” there was no need to hold an enquiry, the Supreme Court held as under: “Withholding of increments of pay simpliciter undoubtedly is a minor penalty within the meaning of Rule 5(iv). But sub-rule (v) postulates reduction to a lower stage in the time scale of pay for a specified period with further directions as to whether or not the government employee shall earn increments of pay during the period of such reductions and whether on the expiry of such period the reduction will or will not have the effect of postponing the future increments of his pay. It is an independent head of penalty and it could be imposed as punishment in an appropriate case. It is one of the major penalties. The impugned order of stoppage of two increments with cumulative effect whether would fall within the meaning of Rule 5(v)? If it so falls Rules 8 and 9 of the Rules require conducting of regular enquiry. The contention of Shri Nayar, learned counsel for the State is that withholding two increments with cumulative effect is only a minor penalty as it does not amount to reduction to a lower stage in the time scale of pay. We find it extremely difficult to countenance the contention. Withholding of increments of pay simpliciter without any hedge over it certainly comes within the meaning of Rule 5(iv) of the Rules. But when penalty was imposed withholding two increments i.e. for two years with cumulative effect, it would indisputably mean that the two increments earned by the employee was cut off as a measure of penalty for ever in his upward march of earning higher scale of pay. In other words the clock is put back to a lower stage in the time scale of pay and on expiry of two years the clock starts working from that stage afresh. The insidious effect of the impugned order, by necessary implication, is that the appellant employee is reduced in his time scale by two places and it is in perpetuity during the rest of the tenure of his service with a direction that two years’ increments would not be counted in his time scale of pay as a measure of penalty. The words are the skin to the language which if peeled off its true colour or its resultant effects would become apparent. When we broach the problem from this perspective the effect is as envisaged under Rule 5(v) of the Rules. It is undoubted that the Division Bench in Sarwan Singh v. State of Punjab (ILR (1985) 2 P & H 193: (1985) 1 SLJ 513 (P&H), P.C.Jain, A.C.J. speaking for the Division Bench, while considering similar question, in paragraph 8 held that the stoppage of increments with cumulative effect, by no stretch of imagination falls within clause (v) of Rules 5 or in Rule 4.12 of Punjab Civil Services Rules. It was further held that under clause (v) of Rule 5 there has to be a reduction to a lower stage in the time scale of pay by the competent authority as a measure of penalty and the period for which such a reduction is to be effective has to be stated and on restoration it has further to be specified whether the reduction shall operate to postpone the future increments of his pay. In such cases withholding of the increments without cumulative effect does not at all arise. In case where the increments are withheld with or without cumulative effect the government employee is never reduced to a lower stage of time scale of pay. Accordingly it was held that clause (iv) Rule 5 is applicable to the facts of that case. With respect we are unable to agree with the High Court. If the literal interpretation is adopted the learned Judges may be right to arrive at that conclusion. But if the effect is kept at the back of the mind, it would always be so, the result will be the conclusion as we have arrived at. If the reasoning of the High Court is given acceptance, it would empower the disciplinary authority to impose, under the garb of stoppage of increments, (sic stoppage) of earning future increments in the time scale of pay even permanently without expressly stating so. This preposterous consequence cannot be permitted to be permeated. Rule 5(iv) does not empower the disciplinary authority to impose penalty of withholding increments of pay with cumulative effect except after holding inquiry and following the prescribed procedure. Then the order would be without jurisdiction or authority of law, and it would be per se void. Considering from this angle we have no hesitation to hold that the impugned order would come within the meaning of Rule 5(v) of the Rules; it is a major penalty and imposition of the impugned penalty without enquiry is per se illegal.” Learned Standing Counsel while conceding that the rule, which is considered by the Supreme Court in the above judgment, is identical to the Regulations in the instant case with respect to the imposition of penalty of withholding of increments, however, submitted that the petitioner failed to question the vires of this Regulation. I find no force in the contention of learned Standing Counsel, because the rule did not in express terms provide that withholding of increment with cumulative effect falls under the head of “Minor Penalties”. It only provides that withholding of increments or promotions is a minor penalty. On the reasoning of the Supreme Court in the above- mentioned case while withholding of increments simpliciter is in the nature of minor penalty, withholding of increment with cumulative effect, which as a consequence will have the effect of reduction to lower post or grade or to a lower stage, constitutes “major penalty”. In effect, the Supreme Court drew a distinction between withholding of increment simpliciter and withholding of increment with cumulative effect, and construed the latter penalty as falling under “reduction to lower post or grade or to a lower stage” under the head “Major Penalties.” It is significant to note that in the instant Regulations, the above-mentioned penalty is included as clause (a) under the head “Major Penalties”. Hence, following the ratio laid down by the Supreme Court in the above-mentioned judgment, the penalty imposed on the petitioner shall be treated as a major penalty. Admittedly, no enquiry has been conducted, after the issuance of charge memo. Even according to the Regulations of the Corporation, the imposition of penalty shall be preceded by holding of enquiry, in case a major penalty is proposed to be imposed. As no such enquiry is held, the impugned order is quashed. Liberty is given to the respondent to initiate the enquiry proceedings afresh, if it so desires. With the above observations, the Writ Petition is allowed. ________________________ C.V.NAGARJUNA REDDY, J Dated:26.12.2008 GJ [1] 1991 Supp (1) Supreme Court Cases 504