Wednesday, 12 August 2015

Whether employee is entitled to get increment when he is suspended?

Increment has a definite concept in service law jurisprudence. It is an increase or addition on a fixed scale; it is a regular increase in salary on such a scale. As noted in SBI v. Central Government Labour Court, (1972) 3 SCC 595, under the labour and industrial laws, an increment is when in a timescale of pay an employee advances from the lower point of scale to the higher by periodic additions. In other words, it is addition in the same scale and not to a higher scale. An increment is an incidence of employment and an employee gets an increment by working the full year and drawing full salary. During the period of suspension, the contract of service remains suspended. The order of suspension by the departmental enquiry has the effect of temporarily suspending the relations between the master and servant with the consequence that the servant is not bound to render service and, therefore, an employee is not entitled to increments during this period which is taken as period not spent on duty.
Equivalent Citation:(2014)13 SCC 622
IN THE SUPREME COURT OF INDIA
C.A. No. 5523 of 2013 (@ SLP(C) No. 9338 of 2012)
Decided On: 17.07.2013
Appellants: State of Punjab
Vs.
Respondent: Jaswant Singh Kanwar
Hon'ble Judges/Coram:H.L. Dattu and Dipak Misra, JJ.

1. Delay condoned. Leave granted.
2. This appeal is directed against the judgment and order passed by the High Court of Judicature of Punjab and Haryana at Chandigarh in L.P.A. No. 898 of 2011, dated 24.05.2011. By the impugned judgment and order, the High Court has affirmed the order passed by the learned Single Judge in Writ Petition (C) No. 5130 of 1999, dated 23.11.2010 and has reached the conclusion that the Respondent is entitled to increments during the period of suspension from 17.02.1988 to 07.01.1993 apart from the pay and allowances which is not more than the subsistence allowance already paid to Jaswant Singh Kanwar-Respondent.
3. The Respondent was working as an Assistant Controller (Finance & Accounts) in the Office of General Manager, Punjab Roadways, Chandigarh, State of Punjab. A physical verification of accounts in the office of the Respondent was carried out by the inspection committee, which revealed that there was a shortage of cash and the three cashiers under the control and supervision of the Respondents had embezzled a sum of ` 3,97,646.70. Keeping the aforesaid aspect in view, the disciplinary authority had initiated disciplinary enquiry proceedings by issuing charge-memo. During the pendency of the disciplinary proceedings, the disciplinary authority thought it fit to keep the Respondent under suspension, by its order dated 17.02.1988 and thereafter the charge-sheet was framed and served upon the Respondent.
4. For the purpose of departmental inquiry, the disciplinary authority had appointed an Enquiry Officer to inquire into the allegations made in the charge-memo which is supported by the statement of imputation. The Enquiry Officer after enquiry had found that the Respondent is not guilty of the charges alleged against him in the charge-memo. However, after the receipt of the Enquiry Officer's report, the disciplinary authority did not concur with the opinion in the enquiry report for more than one reason and accordingly, thought it fit to issue show cause notice to the Respondent, inter alia, directing him to show cause as to why the report of the enquiry officer should not be rejected and proceed to hold with the available evidence on record that the Respondent is guilty of the charges levelled against him in the charge-memo. The Petitioner submitted his reply on 15.10.1992. After receipt of the reply to the show cause notice so issued, the disciplinary authority by its order dated 04.05.1994, has thought it fit to impose major penalty of stoppage of two increments on the Respondent with cumulative effect and has treated the suspension period from 17.02.1998 to 07.01.1993 as leave of the kind due.
5. Thereafter the Respondent on 15.09.1994 made a representation before the authorities against treating the said period of suspension as leave of the kind due. However, the disciplinary authority did not allow the said request made by the delinquent officer-Respondent.
6. Being aggrieved by the finding of the disciplinary authority, the Respondent approached the High Court by way of an appeal. Before the High Court, the learned Counsel for the Respondent herein sought permission to withdraw the writ petition so as to make representation before the Petitioner herein for consideration of his case.
7. The department by its order dated 22.10.1998, after reconsidering all the aspects of the case has allowed the pay and allowances not more than the subsistence allowance already paid to the Respondent during the period of suspension. Further the department once again clarifies that the period of suspension shall not be treated as a period spent on duty.
8. The Respondent, thereafter, had approached the High Court by a Writ Petition, inter alia, requesting the Court to direct the disciplinary authority for grant of increments for the aforesaid period i.e. from 17.02.1988 till 07.01.1993. The High Court, while allowing the Writ Petition has passed the following order:
....In the present case, the impugned order (Annexure P5) was passed on 22.10.1998. Thereafter, the Petitioner has been acquitted in the criminal proceedings as well. Therefore, acquittal of the Petitioner in the criminal case and the fact that his co-employee Assistant Cashier, who had embezzled the funds, has been granted benefit of increments, can be considered as a mitigating circumstance and the doctrine of proportionality can be invoked.
Taking the facts and circumstances of the case in view, the order of punishment dated 22.10.1998 (Annexure P5) is modified to the extent that for the period of suspension, the Petitioner will not be entitled to pay and allowances not more than the subsistence allowance so paid. However, the Petitioner is held entitled to the increments which have accrued to him during the period of this suspension.
[Emphasis supplied by us]
9. Aggrieved by the said order passed by the learned Single Judge, the State had filed an appeal before the Division Bench of the High Court. The Division Bench has affirmed the orders passed by the learned Single Judge. The State is now before us in this appeal, by special leave.
10. We have heard Shri Ajay Kapur, learned senior counsel appearing for the State and Shri Paramjit Batra, learned Counsel appearing for the Respondent. We have also carefully gone through the orders passed by the High Court.
11. The only issue which arises for consideration is whether an official placed under suspension by the disciplinary authority is entitled for grant of increments during the period of suspension.
12. To analyze the above proposition, the dictionary meaning of suspension is required to be set out. The term 'Suspend' would mean 'to debar usually, for a time, from any privilege, the execution of an office or from the enjoyment of an income'. It is temporary deprivation of office or privilege. By reason of suspension, the powers, functions and privileges remain in abeyance but one continues to be subjected to the same discipline and penalties and to the same authorities'. The above definition makes it clear that during the period of suspension, all the privileges and benefits attached to the office is temporarily suspended unless the period of suspension is considered as the period spent on duty.
13. In the instant case, the High Court has concurred with the finding of the disciplinary authority and has come to the conclusion that the period of suspension is not the period spent on duty.
14. "Increment" has a definite concept in service law jurisprudence. It is an increase or addition on a fixed scale; it is a regular increase in salary on such a scale. As noted by this Court in State Bank of India v. The Presiding Officer, Central Government Labour Court, Dhanbad and Anr. MANU/SC/0442/1972 : 1972 3 SCC 595, under the Labour and Industrial Laws, an increment is when in a time scale of pay an employee advances from the lower point of scale to the higher by periodic additions. In other words, it is addition in the same scale and not to a higher scale. Increment is an incidence of employment and an employee gets an increment by working the full year and drawing full salary. During the period of suspension, the contract of service remains suspended. The order of suspension by the departmental enquiry has the effect of temporarily suspending the relations between the master and servant with the consequence that the servant is not bound to render service and, therefore, the Petitioner as an employee is not entitled to increments during this period which is taken as period not spent on duty.
15. The disciplinary authority by its order has imposed stoppage of two increments with cumulative effect as a major penalty for the offences alleged against the Petitioner. The principle of stoppage of increment is laid down in the case of Kulwant Singh Gill v. State of Punjab MANU/SC/0658/1991 : 1991 Suppl. (1) SCC 504, where 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 stoppage of increment is only a major penalty which keeps the Petitioner away from the benefits that would have accrued to him during the suspension period. It is not a new penalty imposed for the same offence in respect of the same subject matter.
16. In our view, the High Court has failed to note the very purpose of the stoppage of increment imposed as a major penalty by the disciplinary authority. The grant of increment after the order of suspension by the authority with the concurrent finding of the period not spent on duty and more so when the order of termination is not declared illegal or void ab-initio would not only defeat the very purpose of levying penalties but would also jeopardize public interest and administration of justice.
17. A careful reading of the language employed in Rule 4.9(a) of the Punjab Civil Service Rules Volume I, Part I read with Rule 7.3(B)(1) would stipulate the conditions on which service counts for increments in a time-scale. The aforesaid provision suggest that only the period spent on duty in a post would be counted for the purpose of increments. Rule 7.3(B)(1) would further stipulate that upon reinstatement of a suspended employee, the competent authority shall consider and make a special order regarding the pay and allowances to be paid to the government employee for the period of his absence from duty including the period of suspension, preceding his dismissal, removal or compulsory retirement, as the case may be and whether or not the said period shall be treated as a period spent on duty. The competent authority in the present case after a careful consideration, in accordance with the rules had although thought it fit to grant the pay and allowances not exceeding the subsistence allowance already granted to the Respondent during the period of suspension but has not granted increments for the period of suspension i.e. the period not spent on duty. It is an admitted fact that the Respondent was kept under suspension pending departmental inquiry with effect from 17.02.1988. The disciplinary authority, by its order dated 22.10.1998 has imposed a major penalty on the Respondent by way of stoppage of two increments with cumulative effect. But subsequently, the disciplinary authority and the High Court has concurred that the period of suspension was period not spent on duty and, therefore, keeping in view, the rules applicable and the general principles of service law jurisprudence, the Respondent would not be entitled to any increment during the aforesaid period of suspension. We, therefore, cannot sustain the orders passed by the Courts below. Accordingly, while allowing the appeal, we set aside the orders passed by the learned Single Judge as affirmed by the Division Bench of the High Court. No costs.
Ordered accordingly.

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