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Wednesday, February 20, 2013

service matter - The maximum punishment that could have been imposed on an employee after conducting due departmental enquiry was dismissal from service. The rule making authority, by way of amendment, has bifurcated the rule 9(vii) into two parts, namely, 9(vii)(a) and 9(vii)(b). As is evincible, the chargesheet only referred to the imposition of major penalty or to be dealt with under the said rules relating to major penalty. In this backdrop, it would be difficult to say that the employee had the vested right to be imposed a particular punishment as envisaged under the unamended rules. Once the charges have been proven, he could have been imposed the punishment of compulsory retirement or removal from service or dismissal from service. The rule making authority thought it apposite to amend the rules to introduce a different kind of punishment which is lesser than the maximum punishment or, for that matter, lesser 47Page 48 punishment than that of compulsory retirement from service. The order of compulsory retirement is a lesser punishment than dismissal or removal as the pension of a compulsorily retired employee, if eligible to get pension under the Pension Rules, is not affected. Rule 9(vii) was only dealing with reduction or reversion but issuance of any other direction was not a part of it. It has come by way of amendment. The same being a lesser punishment than the maximum, in our considered opinion, is imposable and the disciplinary authority has not committed any error by imposing the said punishment, regard being had to the nature of charges. It can be looked from another angle. The rule making authority has splitted Rule 9(vii) into two parts – one is harsher than the other, but, both are less severe than the other punishments, namely, compulsory retirement, removal from service or dismissal. The reason behind it, as we perceive, is not to let off one with simple reduction but to give a direction about the condition of pay on restoration and also not to 48 Page 49 impose a harsher punishment which may not be proportionate. In our view, the same really does not affect any vested or accrued right. It also does not violate any Constitutional protection. 51. In view of the aforesaid analysis, the order passed by the High Court that a double punishment has been imposed does not withstand scrutiny. 52. Consequently, the appeals are allowed. The orders passed by the High Court are set aside and the order of punishment imposed by the disciplinary authority is restored. In the facts and circumstances of the case, there shall be no order as to costs.


Page 1
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.1428-1428    OF 2013
(Arising out of S.L.P. (C) Nos. 24224-24225 of 2008)
The Government of Andhra Pradesh
and Others      ...
Appellants
Versus
Ch. Gandhi                           ...Respondent
J U D G M E N T
Dipak Misra, J.
Leave granted.
2. The present appeals by special leave are directed
against  the  judgment  and  order  dated  14.6.2007
passed  by  the  High  Court  of  Judicature,  Andhra
Pradesh at Hyderabad in Writ Petition No. 12177 of
2007 and the order dated 8.2.2008 passed in Review
Page 2
WPMP (SR) No. 126152 of 2007 arising from the said
writ petition whereby the Division Bench overturned
the  order  dated  16.5.2007  passed  by  the  Andhra
Pradesh  Administrative  Tribunal,  Hyderabad  (for
short “the Tribunal”) in O.A. No. 923 of 2006 on the
ground that the disciplinary authority had imposed
two major penalties.  Be it noted, the High Court
granted liberty to the department to pass appropriate
orders  keeping  in  view  the  Andhra  Pradesh  Civil
Services (Classification, Control and Appeal) Rules,
1991 (for short “the Rules”).
3. The facts which are imperative to be adumbrated are
that a disciplinary proceeding under Rule 5 of the
Rules was initiated against the respondent, a Senior
Accountant  in  the  Office  of  the  Sub  Treasury,
Nakrekal, on the charges that while functioning as
the senior most Accountant in the said office and in charge  of  the  strong  room  keys,  at  the  time  of
surprise  check  by  the  Deputy  Director,  District
Treasury,  Nalgonda,  he  was  absent  and  had  not
signed the attendance register in token of his having
2Page 3
attended  the  office  and  also  not  maintained  the
movement register as required under the Rules; that
he had failed to keep the currency chest book in the
currency chest and not endorsed every transaction;
that he had passed the bills, cheques and challans in
token of approval of the payment/receipts without
signing them; that he had not properly maintained
the strong entrants’ register which was found outside
the strong room and further  the entries were not
recorded and signed by him; that he had failed to
remain present at the time of depositing money or
withdrawing  money  from  the  currency  chest  and
allowed  others  to  operate  the  currency  chest  by
using the keys of joint custodian; and that he had
failed to submit the currency chest slip to R.B.I. on
15.4.2003  in  respect  of  the  currency  chest
transactions of 15.4.2003 and also failed to submit
the daily sheets of 15.4.2003 and 16.4.2003.
4. An Enquiry Officer was appointed to enquire into the
charges  and  he  submitted  the  report  that  the
charges were proven.  On the basis of the enquiry
3Page 4
report, the disciplinary authority, after following the
requisite procedure, imposed the penalty of reversion
to the post of Junior Accountant for two years with
the stipulation that there would be postponement of
future increments.
5. Aggrieved by the said punishment, the respondent
approached the Tribunal in O.A. No. 923 of 2006 and
raised  various  points  assailing  the  validity  of  the
initiation of the proceeding, the manner in which the
enquiry  was  conducted  and  lastly,  that  the
punishment  imposed  was  disproportionate  to  the
misconduct.   The  Tribunal  referred  to  the  Rule
position and came to hold that there was no illegality
or  irregularity  in  the  initiation  of  the  disciplinary
proceeding,  framing  of  charge  or  conduct  of  the
enquiry and further, regard being had to the gravity
of the charge, the punishment could not be treated
to  be  disproportionate.   Being  of  this  view,  the
Tribunal dismissed the original application.
6. The  failure  before  the  Tribunal  compelled  the
respondent  to  invoke  the  jurisdiction  of  the  High
4Page 5
Court which, after adverting to the facts in detail and
the competence of the person who had initiated the
proceeding by issuing the memorandum of charges,
came  to  hold  that  the  findings  recorded  by  the
Tribunal  on  the  said  scores  were  absolutely
defensible and did not warrant any interference.  As
far as the imposition of punishment was concerned, a
contention was advanced that he had been imposed
two major penalties which were not in consonance
with the Rules.  The High Court referred to the order
of punishment, Rule 9 of the Rules that deals with
major penalties and sub-Rule  27 of Rule 11 of the
said  Rules  and  came  to  hold  that  the  penalty
imposed by the disciplinary authority did amount to
imposition  of  two  penalties  and,  accordingly,  set
aside the punishment which had been concurred with
by the tribunal and clarified that the said overturning
of the orders would not preclude the authorities to
pass  appropriate  orders  pertaining  to  punishment
keeping in view the provisions of the Rules.
5Page 6
7. Calling  in  question  the  legal  propriety of the  said
order, it is urged by Mr. G.N. Reddy, learned counsel
for  the  State  and  its  functionaries,  that  the  High
Court  has  erroneously  opined  that  two  major
penalties had been issued in violation of the Rules
though reversion to the lower post for a period of two
years with the stipulation of postponement of future
increments on restoration to higher category does
not tantamount to two major penalties under Rule 9
and, under no circumstances, it contravenes sub-rule
(27) to Rule 11 of the Rules.  It is his submission that
the said punishment, being in consonance with the
Rules and further such imposition of punishment not
being  unknown  to  service  jurisprudence,  did  not
warrant interference by the High Court.  The learned
counsel further canvassed that the amended Rules
permit imposition of such punishment but the same
has not been taken note of by the High Court which
makes the order absolutely vulnerable.
8. Mr. R.S. Krishnan, learned counsel appearing for the
respondent,  resisting  the  aforesaid  proponements,
6Page 7
contended that the interpretation placed by the High
Court  on  the  Rules  cannot  be  found  fault  with
inasmuch as the language employed in the Rules is
absolutely plain, clear and unambiguous and, on a
careful reading of the same, it is manifest that under
the Rules, imposition of two major penalties is not
permissible.  It is further urged by him that when the
language employed in the Rules has been differently
couched and both the employer and employee are
bound by the Rules, what could be jurisprudentially
permissible need not be adverted to in this case.  The
learned  counsel  would  further  submit  that  the
delinquent employee could not have been imposed
such a punishment under Rule 9 of the Rules prior to
its amendment as his case would be governed by the
unamended Rules since the disciplinary proceeding
was initiated prior to the amendment and, at that
time,  the  punishment  that  was  imposed  was  not
envisaged.
9. In reply, the learned counsel for the State submitted
that the respondent would be governed under the
7Page 8
new  Rules  as  clause  (vii)  of  Rule  9  has  been
substituted and the term “substituted” conveys that
the Rule has retrospective effect.  That apart, it is
propounded that even if the rules are not treated as
retrospective, the appellant had no vested right to be
imposed  a  particular  punishment  under  the
unamended Rules.
10. At the very outset, we may clearly state that we are
not concerned with the delinquency of the incumbent
or  the  findings  recorded  in  the  disciplinary
proceeding that has been conducted.  We are also
not  required  to  address  whether  the  competent
authority had initiated the departmental proceeding,
for the respondent has not assailed the order passed
by the Division Bench of the High Court and it is only
the State which has come up in appeal.  Thus, the
only  aspect  that  requires  to  be  dwelled  upon  is
whether the punishment could be imposed in accord
with the amended Rules or under the unamended
Rules.
8Page 9
11. It  is  apt  to  note  here  that  the  punishment  was
imposed  on  1.12.2005.   The  relevant  part  of  the
order  passed  by  the  Director  of  Treasuries  and
Accounts is reproduced below: -
“After  a  detailed  examination  of  the
inquiry report and the explanation of the
charged officer, the disciplinary authority
finds that the charges framed against Sri
Ch. Gandhi the then Senior Accountant and
incharge  Sub  Treasury  Officer,  Sub
Treasury  (non-banking)  Nakrekal  have
been proved.  After careful consideration
of  the  material  facts  and  records  and
explanation of the individual, in exercise of
the powers conferred under Sub Rule 27(ii)
of Rule 11 read with Sub Rule (vii) of rule 9
of  A.P.C.S.  (C.C.&A)  Rules,  1991  hereby
awards a punishment of reversion to the
lower  post  of  junior  accountant  for  two
years  with  effect  on  postponing  future
increments  on  restoration  to  the  higher
category  on  Sri  Ch.  Gandhi,  presently
working  as  senior  Accountant  with
immediate effect.”
12. Regard being had to the nature of the punishment, it
is necessary to scrutinize the Rule position.  After the
amendment on 6.12.2003, the relevant part of Rule 9
which provides for major penalties is as follows: -
“Major Penalties
9Page 10
(vi) withholding  of increments  of  pay with
cumulative effect (G.O.Ms. No. 205, GA
(Ser.C) Dept. dt. 5.6.98);
(vii) (a) save as provided for a in clause
(v)(b), 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  servant  will  earn
increments of pay during the period of
such  reduction  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;
(vii) (b) reduction to lower time-scale of pay,
grade,  post  or  service  which  shall
ordinarily be a bar to the promotion of
the  Government  servant  to  the  timescale of pay, grade, post or service from
which he was reduced, with or without
further directions, regarding conditions
of restoration to the grade or post or
service  from  which  the  Government
servant was reduced and his seniority
and  pay  on  such  restoration  to  that
grade, post or service;
(G.O.Ms. No. 373, G.A.(Ser.C) Dept., dt:
6.12.2003)
(viii) compulsory retirement;
(ix) removal from service which shall not be
a disqualification for future employment
under the Government;
(x) dismissal  from  service  which  shall
ordinarily be a disqualification for future
employment under the Government.”
10Page 11
13. Sub-rule (27) of Rule 11 which has been relied on by
the High Court reads as follows: -
“(27) Without  prejudice  to  the
foregoing provisions;
(i) every  Head  of  Department  may
impose  on  a  member  of  the  State
Services  under  his  control,  the
penalty specified in clause (iii) of rule
9, except in the case of each member
holding a post immediately below his
rank; and
(ii) every Head of Department declared
to  be  the  appointing  authority  may
impose  on  a  member  of  the  State
Service holding a post at first level or
at second level under his control, any
of the penalties specified in clauses (i)
to (viii) of rule 9.
(G.O.Ms.  No.  428,  GA  (Ser.C)  Dept.  dt.
13.10.1999)
(iii) The special Chief Secretary and Chief
Commissioner of Land Administration
may  impose  any  of  the  penalties
specified in clause (ix) and clause (x)
of rule 9 on Mandal Revenue Officers.
(G.O.Ms.  No.  231,  GA  (Ser.C)  Dept.  dt.
7.6.2005)”
14. The High Court, relying on sub-rule (27)(ii) of Rule 11,
has  expressed  the  view  that  the  punishments
imposed against the respondent, namely, reversion
to the lower rank and at the same time stoppage of
11Page 12
increments, come under the purview of two major
penalties  as  contemplated  in  Rule  9  of  the  Rules
which is not permissible.  On a perusal of the order
passed by the High Court, it is evident that the High
Court has referred to the unamended Rules.
15. The Rules were amended on 6.12.2003.  Under the
heading ‘minor penalties’ after clause (v)(a), clause
(v)(b)  was  added.   Under  the  heading  ‘major
penalties’,  clause  7  was  substituted  and  the  said
clause  was  compartmentalized  into  two  parts,
namely,  (vii)(a)  and  (vii)(b).   The  disciplinary
authority, as is vivid from the aforequoted portion,
has imposed the penalty under sub-rule (vii) of Rule 9
of the substituted Rule.
16. Rule 9 of the unamended or the old Rules read as
follows: -
“Rule 9: Major Penalties:
(vi) withholding of increments of pay with
cumulative effect.
(vii) Reduction  to  a  lower  rank  in  the
seniority list or to a lower stage in the
seniority list or to a lower stage in the
timescale of pay or to a lower time
12Page 13
scale of pay not being lower than that
to which he was directly recruited or
to lower grade or post not being lower
than  that  to  which  he  was  directly
recruited,  whether  in  the  same
service or in another service, State or
Subordinate;
(viii) Compulsory retirement;
(ix) Removal from service which shall not
be  a  disqualification  for  future
employment under the Government;
(x) Dismissal  from  service  which  shall
ordinarily  be  a  disqualification  for
future  employment  under  the
Government.”
17. On a perusal of the unamended Rule, there can be no
doubt that clause (vii) only related to reduction to a
lower rank in the seniority list or to a lower time scale
of pay or in the lower grade or pay not being lower
than that to which he was directly recruited.  It did
not have the stipulation of postponement of future
increment  on  restoration  to  the  higher  category.
Thus, the seminal issue is whether the respondent
could have been imposed a punishment under the
amended Rules. It is necessary to state here that the
amended Rules were not brought to the notice of the
High Court.
13Page 14
18. It is useful to note here that the charge-sheet was
issued  on  14.11.2003.   In  Delhi  Development
Authority  v.  H.C.  Khurana
1
,  a  two-Judge  Bench
posed the question relating to the stage when it can
be said that a decision has been taken to initiate the
disciplinary proceeding and, in this context, opined
that the decision to initiate disciplinary proceedings
cannot be subsequent to the issuance of the chargesheet  since  issue  of  the  charge-sheet  is  a
consequence of the decision to initiate disciplinary
proceedings.  Framing  the  charge-sheet  is  the  first
step taken for holding the enquiry into the allegations
on  the  decision  taken  to  initiate  disciplinary
proceedings. The charge-sheet is framed on the basis
of  the  allegations  made  against  the  government
servant; the charge-sheet is then served on him to
enable him to give his explanation; if the explanation
is satisfactory, the proceedings are closed, otherwise,
an enquiry is held into the charges; if the charges are
not  proved,  the  proceedings  are  closed  and  the
government servant exonerated; but if the charges
1
 (1993) 3 SCC 196
14Page 15
are proved, the penalty follows. Thus, the service of
the charge-sheet on the government servant follows
the decision to initiate disciplinary proceedings, and
it does not precede or coincide with that decision.
19. Be it noted, in the said case, the decision rendered in
Union  of  India  and  others  v.  K.V.  Jankiraman
and others
2
 was explained by stating thus: -
“The word ‘issued’ used in this context in
Jankiraman it is urged by learned counsel
for the respondent, means service on the
employee.  We  are  unable  to  read
Jankiraman in this manner. The context in
which  the  word  ‘issued’  has  been  used,
merely means that the decision to initiate
disciplinary  proceedings  is  taken  and
translated into action by despatch of the
charge-sheet  leaving  no  doubt  that  the
decision  had  been  taken.  The  contrary
view would defeat the object by enabling
the government servant, if so inclined, to
evade  service  and  thereby  frustrate  the
decision and get promotion in spite of that
decision.”
20. In Union of India and others v. Sangram Keshari
Nayak
3
,  it  has  been  held  that  a  departmental
proceeding is ordinarily said to be initiated when a
charge-sheet  is  issued.   In  Coal  India  Ltd.  and
2
 (1991) 4 SCC 109
3
 (2007) 6 SCC 704
15Page 16
others  v.  Saroj  Kumar  Mishra
4
, similar view was
reiterated.  In view of the aforesaid pronouncements,
there is not an iota of doubt that the disciplinary
proceeding  was  initiated  under  the  unamended
Rules.
21. At this juncture, we may state with profit that the
amended Rule has not been given any retrospective
effect.  In Tejshree Ghag and others  v.  Prakash
Parashuram  Patil  and  others
5
, it has been ruled
that the State has the power to alter the terms and
conditions of service even with retrospective effect
by making rules framed under the proviso appended
to Article 309 of the Constitution of India, but it is
also  well  settled  that  the  rule  so  made  ordinarily
should state so expressly.
22. In  Marripati  Nagaraja  and  others  v.
Government  of  Andhra  Pradesh  and  others
6
,
this Court has ruled that the State, in exercise of its
power conferred upon it under the proviso appended
4
 (2007) 9 SCC 625
5
 (2007) 6 SCC 220
6
 (2007) 11 SCC 522
16Page 17
to Article 309 of the Constitution of India, is entitled
to  make  rules  with  retrospective  effect  and
retroactive operation. Ordinarily, in absence of any
rule and that too a rule which was expressly given a
retrospective effect, the rules prevailing as on the
date of the notification are to be applied. But if some
rule has been given a retrospective effect which is
within the domain of the State, unless the same is set
aside  as  being  unconstitutional,  the  consequences
flowing therefrom shall ensue. In such an event, the
applicable  rule  would  not  be  the  rule  which  was
existing but the one which had been validly brought
on the statute book from an anterior date.
23. Presently, we shall deal with the contention of the
learned counsel for the State who has laid emphasis
on the fact that the said Rule has been substituted by
the amendment dated 16.12.2003 and, therefore, it
has to be treated to have retrospective effect.  At this
juncture, we may fruitfully refer to a passage from
Maxwell on the Interpretation of Statute, 12
th
 edition,
wherein it has been stated thus: -
17Page 18
“Perhaps no rule of construction is more
firmly  established  than  thus  —  ‘that  a
retrospective operation is not to be given
to a statute so  as to impair an existing
right  or  obligation,  otherwise  than  as
regards matters of procedure, unless that
effect  cannot  be  avoided  without  doing
violence to the language of the enactment.
If the enactment is expressed in language
which  is  fairly  capable  of  either
interpretation, it ought to be construed as
prospective only’. The rule has, in fact, two
aspects,  for  it,  ‘involves  another  and
subordinate  rule,  to  the  effect  that  a
statute is not to be construed so as to have
greater  retrospective  operation  than  its
language renders necessary’.”
24. In  Francis  Bennion's  Statutory  Interpretation,  2nd
Edn.,  while  emphasizing  on  the  concept  of
retrospective  legislation  and  rights,  the  learned
author has stated thus: -
“The essential idea of a legal system  is
that  current  law  should  govern  current
activities.  Elsewhere  in  this  work  a
particular  Act  is  likened  to  a  floodlight
switched on or off, and the general body of
law  to  the  circumambient  air.  Clumsy
though these images are, they show the
inappropriateness of retrospective laws. If
we do something today, we feel that the
law  applying  to  it  should  be  the  law  in
force  today,  not  tomorrow's  backward
adjustment of it. Such, we believe, is the
nature of law. Dislike of ex post facto law is
enshrined in the United States Constitution
and in the Constitution of many American
18Page 19
States, which forbid it. The true principle is
that  lex prospicit non respicit (law looks
forward  not  back).  As  Willes,  J.  said
retrospective legislation is ‘contrary to the
general principle that legislation by which
the conduct of mankind is to be regulated
ought, when introduced for the first time,
to deal with future acts, and ought not to
change the character of past transactions
carried  on  upon  the  faith  of  the  then
existing law’.”
25. In  Hitendra  Vishnu  Thakur  v.  State  of
Maharashtra and others
7
, this Court dwelled upon
the ambit and sweep of the amending Act and the
concept of retrospective effect and, eventually, ruled
thus: -
 “(i)  A  statute  which  affects
substantive  rights  is  presumed  to  be
prospective  in  operation  unless  made
retrospective,  either  expressly  or  by
necessary intendment, whereas a statute
which  merely  affects  procedure,  unless
such a construction is textually impossible,
is  presumed  to  be  retrospective  in  its
application,  should  not  be  given  an
extended meaning and should be strictly
confined to its clearly-defined limits.
(ii)  Law  relating  to  forum  and
limitation is procedural in nature, whereas
law relating to right of action and right of
appeal  even  though  remedial  is
substantive in nature.
7
 (1994) 4 SCC 602
19Page 20
(iii) Every litigant has a vested right in
substantive law but no such right exists in
procedural law.
(iv) A procedural statute should not
generally  speaking  be  applied
retrospectively where the result would be
to create new disabilities or obligations or
to  impose  new  duties  in  respect  of
transactions already accomplished.
(v) A statute which not only changes
the procedure but also creates new rights
and  liabilities  shall  be  construed  to  be
prospective in operation, unless otherwise
provided, either expressly or by necessary
implication.”
26. From the aforesaid analysis of law, it is graphically
clear  that  there  is  a  presumption  against  the
retrospective operation of a statute, and further a
greater  retrospectivity  cannot  be  conferred  on  a
statute than the language makes it necessary.  
27. In  the  case  at  hand,  the  notification  uses  the
phraseology that clause (vii) shall be substituted with
the  amending  clause.   The  provision  which  is
substituted  by  the  amending  Rules,  does  not
obliterate the rights of the parties as if they never
existed.   A  substituted  provision  is  the  resultant
factor of the amendment in the Rules and it shall
20Page 21
guide  the  consequences  that  follow  from  the
amended Rules.  In Bhagat Ram Sharma v. Union
of  India  and  others
8
,  a  two-Judge  Bench,  while
dealing with the Punjab Public Service Commission
(Conditions of Service) Regulations, 1958, making a
distinction between two regulations, opined that in
the absence of any provision giving Regulation 8(3) a
retrospective operation, the same cannot prima facie
bear a greater retroactive effect than intended.  In
this context, the Court proceeded to state as follows:
-
“17. It is a matter of legislative practice to
provide while enacting an amending law,
that an existing provision shall be deleted
and  a  new  provision  substituted.   Such
deletion  has  the  effect  of  repeal  of  the
existing provision.  Such a law may also
provide  for  the  introduction  of  a  new
provision.   There  is  no  real  distinction
between ‘repeal’ and an ‘amendment’.  In
Sutherland’s  Statutory  Construction,  3
rd
Edn., Vol 1 at p. 477, the learned author
makes the following statement of law:
“The distinction between repeal and
amendment as these terms are used
by the Courts is arbitrary.  Naturally
the use of these terms by the Court is
based largely on how the Legislature
have  developed  and  applied  these
8
 AIR 1988 SC 740
21Page 22
terms  in  labeling  their  enactments.
When a section is being added to an
Act or a provision added to a section,
the  Legislatures  commonly  entitled
the Act as an amendment..... When a
provision is withdrawn from a section,
the  Legislatures  call  the  Act  an
amendment  particularly  when  a
provision is added to replace the one
withdrawn.  However, when an entire
Act  or  section  is  abrogated  and  no
new  section  is  added  to  replace  it,
Legislatures  label  the  Act
accomplishing  this  result  a  repeal.
Thus  as  used  by  the  Legislatures,
amendment and repeal may differ in
kind  –  addition  as  opposed  to
withdrawal  or  only  in  degree  –
abrogation  of  part  of  a  section  as
opposed  to  abrogation  of  a  whole
section or Act; or more commonly, in
both kind and degree – addition of a
provision  to  a  section  to  replace  a
provision being abrogated as opposed
by abrogation of a whole section of an
Act.   This  arbitrary  distinction  has
been followed by the Courts, and they
have  developed  separate  rules  of
construction for each.  However, they
have  recognized  that  frequently  an
Act purporting to be an amendment
has the same qualitative effect as a
repeal – the abrogation of an existing
statutory  provision  –  and  have
therefore  applied  the  term  ‘implied
repeal’ and the rules of construction
applicable  to  repeals  to  such
amendments.”
18. Amendment is in fact, a wider term
and it includes abrogation or deletion
of a provision in an existing statute.
If the amendment of an existing law is
22Page 23
small, the Act professes to amend; if
it is extensive, it repeals a law and reenacts  it.   An  amendment  of
substantive  law  is  not  retrospective
unless  expressly  laid  down  or  by
necessary implication inferred.
19. For  the  sake  of  completeness,  we
wish to add that mere use of the word
‘substitution’  does  not  imply  that
Regn.  8(3)  must  relate  back  to
November  1,  1956,  the  appointed
day.”
28. In  Pyare Lal Sharma  v. Managing  Director and
others
9
, the Court was dealing with Regulation 16.14
of Jammu and Kashmir Industries Employees Service
Rules  and  Regulations.   Be  it  noted,  the  said
regulation was amended on April 21, 1983.  In the
earlier regulations, certain grounds were provided for
termination of service of a permanent employee.  In
the  amended  regulation,  the  ground,  namely,
unauthorized absence, was added apart from other
grounds.  The services of the appellants therein were
terminated on the ground of unauthorized absence.
The Court scanned the scheme of Regulation 16.14
before amendment which consisted of only clauses
(a) and (b) relating to abolition of post and unfitness
9
  (1989) 3 SCC 448
23Page 24
on medical ground and the company, the employer
therein, had no authority to terminate the services of
an employee on the ground of unauthorised absence
without holding disciplinary proceedings against him.
The  regulation  was  amended  on  20-4-1983  and
grounds  (c)  and  (d)  were  added.  The  amended
regulation could not operate retrospectively but only
from the date of the amendment. Ground (c) under
which action was taken came into existence only on
20-4-1983 and as such, the period of unauthorised
absence  which  could  come  within  the  mischief  of
ground (c) has to be the period posterior to 20-4-
1983 and not anterior to that date.
29. After  analyzing  the  facts,  the  two-Judge  Bench
expressed as follows:-
“The period of absence indicated in the
show-cause notice is obviously prior to
April 20, 1983. The period of absence
prior to the date of amendment cannot
be taken into consideration. When prior
to April 20, 1983 the services of person
could not be terminated on the ground
of  unauthorised  absence  from  duty
under Regulation 16.14 then it is wholly
illegal to make the absence during that
period as a ground for terminating the
services of Sharma. It is basic principle
24Page 25
of  natural  justice  that  no  one  can  be
penalised on the ground of a conduct
which was not penal on the day it was
committed.”
[Emphasis supplied]
30. In “Principles of Statutory Interpretation” the learned
author, Justice G. P. Singh, while discussing on the
said  decision  in  the  context  of  retrospective
operation pertaining to the penal statutes, has stated
thus:-
“This  case  shows  that  the  rule  of
construction against retroactivity of penal
laws is not restricted to Acts providing for
criminal offences but applies also to laws
which  provide  for  other  penal
consequences  of  a  severe  nature,  e.g.
termination of service.”
31. In  Ritesh  Agarwal  and  Another  v.  Securities
and Exchange Board of India and Others
10
,  the
issue was whether the Regulations that came into
force on 25.10.1995 could apply to a case where the
cause of action arose prior thereto.  In the aforesaid
context, it has been held that :-
“Ex facie, a penal statute will not have any
retrospective  effect  or  retroactive
operation.  If  commission  of  fraud  was
10
  (2008) 8 SCC 205
25Page 26
complete  prior  to  the  said  date,  the
question of invoking the penal provisions
contained in the said Regulations including
Regulations 3 to 6 would not arise.”
32. In  this  context,  we may  refer  to  the observations
made  in  Government  of  India  and  Others  v.
Indian Tobacco Association
11
 as follows:-
“We are not oblivious of the fact that in
certain situations, the court having regard
to  the  purport  and  object  sought  to  be
achieved by the legislature may construe
the  word  “substitution”  as  an
“amendment” having a prospective effect
but such a question does not arise in the
instant case.”
We  may  also  note  that  in  the  said  case,  the  Court
observed  that  the  doctrine  of  fairness  also  is  to  be
considered  to  be  a  relevant  factor  for  construing  the
retrospective operation of a statute.
33. In view of the aforesaid, we have no hesitation in
mind that the amended Rule despite having been
substituted has no retrospective effect.  That apart,
the  notification  uses  the  phraseology  “shall  be
11
 (2005) 7 SCC 396
26Page 27
substituted” which clearly indicates the fact that the
amended Rule is prospective.
34. The controversy does not rest there.  The learned
counsel for the State has urged that even if the Rule
is not retrospective, the decision having been taken
after  the  Rules  have  come  into  force,  it  is  the
amended  Rule  which  would  be  applicable.   It  is
propounded by him that there could be alteration of
service conditions by framing the subsequent rule or
regulation and, hence, the date of the decision is the
relevant date to attract the applicability of the rule.
It  is  also  highlighted  that  the  respondent,  in  the
obtaining circumstances, had no vested right to be
imposed  a  particular  punishment  under  the
unamended Rules.
35. To  appreciate  the  aforesaid  stand,  we  think  it
apposite to survey certain authorities in the field.  In
Roshan  Lal  Tandon  v.  Union  of  India  and
another
12
, the Constitution Bench was dealing with
the contention of the petitioner therein that he had a
12
 AIR 1967 SC 1889
27Page 28
contractual right as regards the condition of service
applicable to him at the time he entered Grade ‘D’
and the condition of service could not be altered to
his  disadvantage  afterwards  by  the  notification
issued  by  the  Railway  Board.   Repelling  the
contention, the Bench held thus: -
“It is true that the origin of Government
service is contractual.  There is an offer
and acceptance in every case.  But once
appointed  to  his  post  or  office  the
Government servant acquires a status and
his  rights  and  obligations  are  no  longer
determined by consent of both parties, but
by statute or statutory rules which may be
framed  and  altered  unilaterally  by  the
Government.   In  other  words,  the  legal
position of a Government servant is more
one of status than of contract.  The hallmark of status is the attachment to a legal
relationship of rights and duties imposed
by  the  public  law  and  not  by  mere
agreement of the parties.  The emolument
of the Government servant and his terms
of  service  are  governed  by  statute  or
statutory rules which may be unilaterally
altered  by  the  Government  without  the
consent of the employee.”
Thereafter,  their  Lordships  referred  to  a  passage
from Salmond and Williams on Contracts and, eventually,
ruled thus: -
28Page 29
“We are therefore of the opinion that the
petitioner has no vested contractual right
in regard to the terms of his service and
that Counsel for the petitioner has been
unable  to  make  good his  submission  on
this aspect of the case.”
36. In Raj Kumar  v.  Union of India and others
13
, the
larger  Bench  overruled  the  decision  in  Senior
Superintendent,  R.M.S.  Cochin  and  another  v.
K.V.  Gopinath,  Sorter
14
and  observed  that  the
rules made under the proviso to Article 309 of the
Constitution  are  legislative  in  character  and,
therefore, can be given effect to retrospectively.
37. In  Ex-Capt.  K.C.  Arora  and  another  v.  State  of
Haryana and others
15
, a notification was issued on
August 19, 1976 amending the definition clause of
‘military  service’  in  Rule  2  of  the  Rules.   The
notification was issued with retrospective effect from
November 1, 1966 and it restricted the benefits of
military service upto January 10, 1968.  A question
arose whether the vested rights which had accrued
to the petitioner therein in 1969, 1970 and 1971 had
13
 AIR 1975 SC 1116
14
 AIR 1972 SC 1487
15
 (1984) 3 SCC 281
29Page 30
been taken away.  Dealing with the controversy, the
three-Judge Bench referred to the Constitution Bench
decision in State of Gujarat v. Raman Lal Keshav
Lal Soni
16
 and, eventually, pronounced thus: -
“In view of this latest pronouncement by
the Constitution Bench of this Court, the
law  appears  to  be  well  settled  and  the
Haryana  Government  cannot  take  away
the accrued rights of the petitioners and
the appellants by making amendment of
the rules with retrospective effect.”
38. In  Raman  Lal  Keshav  Lal  Soni (supra), the Court
had observed that the amending Act which has been
made retrospective to navigate around the obstacles
of Article 311 and Article 14 of the Constitution to
bring  about  an  artificial  situation  could  not  be
allowed to stand.  The Constitution Bench had posed
a question whether a law could be made to destroy
today’s  accrued  constitutional  rights  by  artificially
reverting to a situation which existed 17 years before
and answered it in the negative.  It may be noted
with  profit  that  in  the  said  case,  the  Constitution
Bench has ruled thus: -
16
 (1983) 2 SCC 33
30Page 31
“The legislature is undoubtedly competent
to  legislate  with  retrospective  effect  to
take  away  or  impair  any  vested  right
acquired under existing laws but since the
laws  are  made  under  a  written
Constitution, and have to conform to the
dos and don’ts of the Constitution, neither
prospective nor retrospective laws can be
made  so  as  to  contravene  fundamental
rights.   The  law  must  satisfy  the
requirements  of  the  Constitution  today
taking  into  account  the  accrued  or
acquired rights of the parties today.  The
law cannot say, 20 years ago the parties
had no right, therefore, the requirements
of the Constitution will be satisfied if the
law is dated back by 20 years.  We are
concerned  with  today’s  rights  and  not
yesterday’s.  A legislature cannot legislate
today  with  reference  to  a  situation  that
obtained  20  years  ago  and  ignore  the
march  of  events  and  the  constitutional
rights  accrued  in  the  course  of  the  20
years.”
From the aforesaid Constitution Bench decision, it is
graphically clear that a vested right cannot be impaired by
bringing  a  law  as  that  is  likely  to  contravene  the
Constitutional Rights.  As stated there, the law is required
to  satisfy  the  requirements  of  the  Constitution  today
taking into account the accrued or acquired rights of the
parties  today.   The  Bench  has  emphasized  that  a
legislature  cannot  legislate  today  with  reference  to  a
situation that obtained 20 years before and ignore the
31Page 32
march of events and the constitutional rights accrued in
the course of two decades.  Thus, vested and accrued
rights are not to be impaired.
39. To  understand  what  is  precisely  meant  by  vested
right in the context of a service rule, it is necessary
to  understand  and  appreciate  how  this  Court  has
viewed  the  said  right  in  that  conspectus.   The
Constitution  Bench  in  Chairman,  Railway  Board
and others v. C.R. Rangadhamaiah and others
17
was dealing with the validity of the notification dated
5.12.1988  issued  by  the  Railway  Administration
under the proviso to Article 309 of the Constitution
whereby  Rule  2544  of  the  Indian  Railway
Establishment  Code,  Volume  II  (Fifth  Reprint)  had
been amended with retrospective effect.  By virtue of
the amendment, the quantum of percentage of the
running allowance for the purpose of retirement and
other  benefits  was  reduced  with  effect  from
1.1.1973.  The notification was challenged before the
Delhi High Court which transferred it to the Central
17
 (1997) 6 SCC 623
32Page 33
Administrative Tribunal after coming into force of the
Administrative  Tribunals  Act,  1985.   The  Tribunal
treated  the  said  notification  as  an  executive
instruction and opined that the same could not be
accepted  to  be  a  statutory  amendment  of  the
existing rules governing the running allowance.  The
said  order  was  not  challenged  by  the  Railway
Administration.  However, a notification was issued
on 5.12.1988, the validity of which was challenged in
some pending petitions.  As various Benches of the
Tribunal  rendered  conflicting  decisions,  the  matter
was referred to a larger Bench and the Full Bench of
the Tribunal opined that though under the proviso to
Article  309  of  the  Constitution  the  President  has
power to promulgate rules with retrospective effect,
yet it is subject to the condition that the rules do not
offend  any  constitutional  rights  or  deprive  an
employee of his valuable vested right like pension
after retirement as such deprivation of vested right is
violative  of  Article  14  of  the  Constitution  being
unreasonable and arbitrary.  A three-Judge Bench of
33Page 34
this Court referred the matter to the larger Bench by
passing the following order: -
“Two questions arise in the present case,
viz., (i) what is the concept of vested or
accrued rights so far as the government
servant  is  concerned,  and  (ii)  whether
vested  or  accrued  rights  can  be  taken
away  with  retrospective  effect  by  rules
made under the proviso to Article 309 or
by  an  Act  made  under  that  article,  and
which of them and to what extent.
We find that the Constitution Bench
decisions in Roshan Lal Tandon v. Union of
India
18
, B.S. Vadera v. Union of India
19
 and
State of Gujarat v. Raman Lal Keshav Lal
Soni
20
 have been sought to be explained
by two three-Judge Bench decisions in K.C.
Arora v. State of Haryana
21
 and K. Nagaraj
v.  State of A.P.
22
in addition to the twoJudge Bench decisions in P.D. Aggarwal v.
State of U.P.
23
 and K. Narayanan v. State of
Karnataka
24
.   Prima  facie,  these
explanations go counter to the ratio of the
said Constitution Bench decisions.  It is not
possible  for  us  sitting  as  a  three-Judge
Bench to resolve the said conflict.  It has,
therefore, become necessary to refer the
matter to a larger Bench.  We accordingly
refer  these  appeals  to  a  Bench  of  five
learned Judges.”
18
 AIR 1967 SC 1889
19
 AIR 1969 SC 118
20
 (1983) 2 SCC 33
21
 (1984) 3 SCC 281
22
 (1985) 1 SCC 523
23
 (1987) 3 SCC 622
24
 1994 Supp (1) SCC 44
34Page 35
The Constitution Bench analysed the decisions which
have been mentioned in the referral order and observed
as follows: -
“24. In  many  of  these  decisions  the
expressions  “vested  rights”  or  “accrued
rights” have been used while striking down
the impugned provisions which had been
given retrospective operation so as to have
an  adverse  effect  in  the  matter  of
promotion,  seniority,  substantive
appointment, etc., of the employees. The
said  expressions  have  been  used  in  the
context  of  a  right  flowing  under  the
relevant  rule  which  was  sought  to  be
altered with effect from an anterior date
and  thereby  taking  away  the  benefits
available under the rule in force at that
time.  It  has  been  held  that  such  an
amendment  having  retrospective
operation which  has the effect of taking
away  a  benefit  already  available  to  the
employee  under  the  existing  rule  is
arbitrary,  discriminatory  and  violative  of
the  rights  guaranteed  under  Articles  14
and 16 of the Constitution. We are unable
to  hold  that  these  decisions  are  not  in
consonance with the decisions in  Roshan
Lal  Tandon,  B.S.  Yadav and  Raman  Lal
Keshav Lal Soni.”
40. After so stating, the Constitution Bench stated that in
the  said  case,  the  Court  was  concerned  with  the
pension  payable  to  the  employees  after  their
retirement.   It  took  note  of  the  fact  that  the
35Page 36
respondents were no longer in service on the date of
issuance  of  the  impugned  notification  and  the
amendments in the rules were not restricted in their
application in futuro.  It was further observed that the
amendments applied to employees who had already
retired and are no longer in service on the date when
the notifications were issued.  After referring to the
pronouncements in Deokinandan Prasad  v.  State
of  Bihar
25
,  D.S.  Nakara  v.  Union  of  India
26
 and
Indian Ex-Services League v. Union of India
27
, it
has been ruled thus: -
“33. Apart  from  being  violative  of  the
rights then available under Articles 31(1)
and 19(1)(f), the impugned amendments,
insofar  as  they  have  been  given
retrospective operation, are also violative
of the rights guaranteed under Articles 14
and 16 of the Constitution on the ground
that they are unreasonable and arbitrary
since the said amendments in Rule 2544
have the effect of reducing the amount of
pension  that  had  become  payable  to
employees who had already retired from
service  on  the  date  of  issuance  of  the
impugned  notifications,  as  per  the
provisions  contained  in  Rule  2544  that
were  in  force  at  the  time  of  their
retirement.”
25
 (1971) 2 SCC 330
26
 (1983) 1 SCC 305
27
 (1991) 2 SCC 104
36Page 37
41. We have referred to the aforesaid verdict in detail as
it deals with the vested and accrued right in service
jurisprudence and how the same cannot be affected
by  retrospective  amendments.   We  have  already
opined  that  the  amendment  to  the  rules  is  not
retrospective.   Therefore,  the  fulcrum  of  the
controversy is whether the respondent had a vested
or  accrued  right  to  be  visited  with  a  particular
punishment  engrafted  under  Rules  9  of  the
unamended  Rules.   As  has  been  held  earlier,  the
disciplinary proceeding had been initiated under the
unamended  rules.     Under  the  unamended  rule
9(vii), the punishment provided was reduction to a
lower rank in the seniority list or to a lower stage in
the seniority list or to a lower stage in the timescale
of pay or to a lower time scale of pay not being lower
than that to which he was directly recruited or to
lower  grade  or  post not  being lower  than  that  to
which  he  was  directly  recruited.   After  the
amendment, Rule 9(vii) has been bifurcated into two
parts.  Under Rule 9(vii)(a), the punishment that is
37Page 38
provided is 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
servant  would  earn  increments  of  pay  during  the
period of such reduction and whether on the expiry of
such period, the reduction would or would not have
the effect of postponing the future increments of his
pay.   Rule  9(vii)(b)  deals  with  reduction  to  lower
time-scale of pay, grade, post or service which shall
ordinarily  be  a  bar  for  promotion  with  or  without
further direction regarding conditions of restoration
to  the  grade  or  post  or  service  from  which  the
Government servant was reduced and his seniority
and pay on such restoration to that grade, post or
service.   When  both  the  rules  are  read  in
juxtaposition, it is luculent that though  the earlier
Rule 9(vii) provided for reduction to lower grade or
post, yet it did not stipulate imposition of condition
on restoration as regards his seniority and pay to the
original grade or post.  It is noticeable that after the
amendment, Rule 9(vii)(a) only provides reduction to
38Page 39
a lower stage in the time scale of pay for a specified
period  and  empowers  the  disciplinary  authority  to
issue  a  direction,  if  necessary,  whether  the
delinquent would earn increment of pay during the
period of such reduction and whether such reduction
will or will not have the effect of postponement in
future increments of pay.  Rule 9(vii)(b) deals with
reduction  to  lower  timescale  of  pay  and  other
reductions which we have already stated.  There is a
distinction between reduction to a lower stage in the
time scale of pay and reduction to a lower time scale
of pay.  Needless to say, in clause (vii)(a), there is no
provision for reduction to a lower rank or lower grade
or post.  That is separately provided in clause (vii)(b).
Whenever there is a reduction to a lower scale in the
timescale of pay for a specified period, the employee
remains in the said post and cadre but the scale of
pay is reduced to a lower stage.  Reduction to a lower
time scale of pay has more serious impact than the
reduction in the stage of pay itself.  Reduction to a
lower  post  has  a  severe  consequence.   Similarly,
39Page 40
reduction in lower rank in the seniority has a different
concept.
42. Bestowing our thoughtful considerations we find that
as  far  as  the  major  penalty  under  Rule  9(vii)  is
concerned,  the  rule  making  authority,  under  the
amended rule, has bifurcated/compartmentalized the
punishment  into  two  compartments  –  one  slightly
lesser than the other.  Under the old rule, there was a
singular punishment and there was no stipulation as
regards the earning of increments or imposition of
conditions  on  restoration  to  the  grade  or  post  or
service concerned.  It is worth noting that under the
unamended rule, there were three other categories
of  punishments,  namely,  compulsory  retirement,
removal  from  service  and  dismissal  from  service.
The said punishments have been maintained in the
new  rules.   In  the  case  at  hand,  the  disciplinary
proceeding was initiated by serving a charge-sheet
for the purpose of imposition of a major penalty and,
therefore,  the  maximum  punishment  of  dismissal
could have been imposed on the respondent.
40Page 41
43. The thrust of the matter is whether the respondent
could  have  been  imposed  punishment  under  Rule
9(vii)  of  the  unamended  rules  and  no  other
punishment.   The  rules  have  been  framed  under
Article 309 of the Constitution.  There can be no cavil
that by amending the rule, a punishment cannot be
imposed in respect of a misconduct or delinquency
which was not a misconduct or a ground to proceed
in a departmental enquiry before the amended rules
came  into  force.   Further,  a  person  cannot  be
subjected to a penalty greater than which might have
been inflicted under the rule in force at the time of
commission of delinquency or misconduct.
44. We have already referred to the decision in  Pyare
Lal  Sharma (supra) wherein this Court had opined
that no one can be penalised on the ground of a
conduct  which  was  not  penal  on  the  date  it  was
committed.  We have also referred to the view of the
learned  author,  Justice  G.P.  Singh,  in  the  book,
“Principles of Statutory Interpretation”, wherein he
has  stated  that  the  case  of  Pyare  Lal  Sharma
41Page 42
(supra) shows that the rule of construction against
retroactivity of penal laws is not restricted to Acts
providing  for  criminal  offences but applies also  to
laws which provide for other penal consequences of a
severe nature, namely, termination of service.  In the
said case, unauthorized absence was not a condition
for passing an order of termination.  The same was
incorporated later on.  In that backdrop, the view was
expressed  by  this  Court  in  Pyare  Lal  Sharma
(supra).
45. Before  we  proceed  to  scan  the  rule  position,  we
would like to refer to certain authorities rendered in
the  context  of  clause  (1)  of  Article  20  of  the
Constitution.  We are absolutely conscious that there
are certain authorities of this Court wherein it has
been laid down that Article 20(1) of the Constitution
is not applicable to civil consequences but only to
criminal offences.  However, by way of analogy, we
will be referring to certain authorities for the purpose
of  understanding  what  constitutes  retrospective
penal consequence in its conceptual essentiality.
42Page 43
46. In K. Satwant Singh v. The State of Punjab
28
, the
question arose with regard to the penalty imposed
under Section 420 of the Indian Penal Code.  At the
time of occurrence, Section 420 of the Indian Penal
Code did not provide for minimum sentence of fine.
By virtue of an amendment, imposition of minimum
fine became compulsory.  The Constitution Bench,
dealing with the said facet, opined thus: -
“In  the  present  case  a  sentence  of
imprisonment  was,  in  fact,  imposed  and
the  total  of  fines  imposed,  whether
described as “ordinary” or “compulsory”,
was not less than the amount of money
procured by the appellant by means of his
offence.  Under S. 420 of the Indian Penal
Code an unlimited amount of fine could be
imposed.  Article 20(1) of the Constitution
is in two parts.  The first part prohibits a
conviction of any person for any offence
except for violation of law in force at the
time of the commission of the act charged
as an offence.  The latter part of the Article
prohibited  the  imposing  of  a  penalty
greater than that which might have been
inflicted under the law in force at the time
of  the  commission  of  the  offence.   The
offence with which the appellant had been
charged was cheating punishable under S.
420 of the Indian Penal Code which was
certainly a law in force at the time of the
commission of the offence.  The sentence
of imprisonment which was imposed upon
28
 AIR 1960 SC 266
43Page 44
the  appellant  was  certainly  not  greater
than  that  permitted  by  S.  420.   The
sentence of fine also was not greater than
that which might have been inflicted under
the law  which  had been  in  force at the
time of the commission of the offence, as a
fine unlimited in extent could be imposed
under the section.”
47. In  Smt.  Maya  Rani  Punj  v.  Commissioner  of
Income-tax,  Delhi
29
,  a  three-Judge  Bench  was
dealing with the provisions of imposition of penalty
under the Income-tax Act, 1961.  The question before
the Court was that under Section 28 of the Incometax  Act,  1922,  the  upper  limit  of  penalty  was
provided  and  there  was  no  prescription  of  any
particular rate as confined under Section 271(1)(a) of
the 1961 Act.  The Court observed that the penalty
contemplated in the respective sections of the two
Acts is quasi-criminal in character.  Reference was
made to Article 20(1) of the Constitution and it was
opined that under the said Article, no person is to be
subjected to a penalty greater than which might have
been inflicted under the law in force at the time of
commission of the offence.  The contention that the
29
 AIR 1986 SC 293
44Page 45
penalty should have been levied in accordance with
Section 28 of the 1922 Act and not under Section
271(1)(a) of the 1961 Act was not accepted by the
Court.   The  three-Judge  Bench  referred  to  the
pronouncement in  K.  Satwant  Singh  (supra) and,
eventually,  after  quoting  a  passage  from  there,
observed as follows: -
“It is conceded that under section 28 of the
1922 Act in the facts of the case a fine of
more than Rs.4,060 (being within the limit
of 1½ times of the tax amount) could have
been  levied.   While  conceding  to  that
extent,  Mr.  Dholakia  submits  that  the
decision of the Constitution Bench of this
Court  in  Satwant  Singh’s  case  requires
reconsideration  as  it  has  not  taken  into
account the ratio of an important decision
of the United States Supreme Court in the
case  of  Elbert  B.  Lindsay  v.  State  of
Washington, (1937) 81 Law Ed 1182.  We
are  bound  by  the  decision  of  the
Constitution Bench.  It has held the field
for  a  quarter  of  a  century  without
challenge  and  non-consideration  of  an
American  decision  which  apparently  was
not than cited before this Court does not at
all justify the submission at the Bar for a
reconsideration  of  the  decision  of  this
Court in Satwant Singh’s case (AIR 1960
SC 266).”
45Page 46
48. In Tiwari Kanhaiyalal etc.  v.  The Commissioner
of Income-tax, Delhi
30
, while dealing with a penal
provision  under  the  Income-tax  Act,  1922  and
Income-tax Act, 1961 in the backdrop of clause (1) of
Article 20 of the Constitution, this Court opined that
the punishment provided under the 1961 Act being
greater than the one engrafted under the provisions
under the 1922 Act, the appellant therein was not
entitled to press into the service the second part of
clause (1) of Article 20 of the Constitution.
49. At this juncture, we may state that an ex post facto
law may be retrospective, if it is ameliorative.  But in
the present context, delineation on the said score is
not warranted.
We confine our analysis pertaining to
the vested or accrued right and imposition of higher
punishment that was not permissible at the time of
initiation of departmental proceeding.  
50. In the case at hand, under the unamended rule, there
were,  apart  from  stoppage  of  increment  with
cumulative effect and reduction in rank, grade, post
30
 AIR 1975 SC 902
46Page 47
or  service,   three  major  punishments,  namely,
compulsory retirement, removal and dismissal from
service  by  which  there  was  severance  of  service.
The  maximum  punishment  that  could  have  been
imposed  on  an  employee  after  conducting  due
departmental  enquiry  was  dismissal  from  service.
The rule making authority, by way of amendment,
has bifurcated the rule 9(vii) into two parts, namely,
9(vii)(a) and 9(vii)(b).  As is evincible, the chargesheet only referred to the imposition of major penalty
or to be dealt with under the said rules relating to
major penalty.  In this backdrop, it would be difficult
to say that the employee had the vested right to be
imposed a particular punishment as envisaged under
the unamended rules.  Once the charges have been
proven, he could have been imposed the punishment
of compulsory retirement or removal from service or
dismissal from service.  The rule making authority
thought it apposite to amend the rules to introduce a
different kind of punishment which is lesser than the
maximum  punishment  or,  for  that  matter,  lesser
47Page 48
punishment than that of compulsory retirement from
service.   The order  of compulsory retirement  is  a
lesser punishment than dismissal or removal as the
pension of a compulsorily retired employee, if eligible
to  get  pension  under  the  Pension  Rules,  is  not
affected.  
Rule 9(vii) was only dealing with reduction
or reversion but issuance of any other direction was
not a part of it.  It has come by way of amendment.

The  same  being  a  lesser  punishment  than  the
maximum, in our considered opinion, is imposable
and the disciplinary authority has not committed any
error by imposing the said punishment, regard being
had to the nature of charges.  It can be looked from
another  angle.   
The  rule  making  authority  has
splitted Rule 9(vii) into two parts – one is harsher
than the other, but, both are less severe than the
other punishments, namely, compulsory retirement,
removal  from  service  or  dismissal.   
The  reason
behind it, as we perceive, is not to let off one with
simple reduction but to give a direction about the
condition  of  pay  on  restoration  and  also  not  to
48 Page 49
impose  a  harsher  punishment  which  may  not  be
proportionate. 
 In our view, the same really does not
affect any vested or accrued right.  It also does not
violate any Constitutional protection. 
51. In view of the aforesaid analysis, the order passed by
the High Court that a double punishment has been
imposed does not withstand scrutiny. 
52. Consequently, the appeals are allowed.  The orders
passed by the High Court are set aside and the order
of punishment imposed by the disciplinary authority
is restored.  In the facts and circumstances of the
case, there shall be no order as to costs.
……………………………….J.
[K. S. Radhakrishnan]
……………………………….J.
                                           [Dipak Misra]
New Delhi;
February 19, 2013
49