1. This appeal is filed by the General Manager, soutnem Railway, Madras, from the order of Veeraswami J. in w.p. Na. 1032 of 1959, See : AIR1963Mad35 Ed. a petition filed under Article 225 of the Constitution of India, for the issue of a writ of certioran, quashing the order of the General Manager, Southern Railway, Madras, terminating the services of the respondent in this appeal, J. B. Prushotham. The prior facts which are necessary for a consideration of the appeal are briefly the following, the respondent entered the railway service on 1st 01 February 1935, and was promoted as driver in 1945, and crumbed in that .post in October 1946. Since it was Deversed that fee had engaged himself in subversive activities, he was arrested by the police on 1-4-1948 and remained under detention till 26-2-1951, during which period lie was also placed under .suspension. Apparently the period of detention came on to an end on 26-2-1951. Un 2-4-1951, he applied to the General Manager to be posted back to duty. the 'General Manager consulted the police about his activities, and on receiving an adverse report, he issued to the -respondent on 16-10-1951 a notice under the Railway Services (Safeguarding of National Security) Rules 1949, and the was asked to show cause against punishment.
The respondent made his representations and his case was referred to a Committee of Advisers. He was given the opportunity to be present before the committee. the Committee gave a report against Him. Then the Generals. Manager informed the respondent that the department was satisfied about the respondent's subversive activities, that his retention in public service was prejudicial to national security, and that it was provisionally decided to terminate his services, and accordingly he was asked to show cause why action as proposed should not be taken against him. The respondent seems to have also made certain representations against the action -proposed to be taken. At that time, there were before the Railway authorities, a number of other cases similar to that of the respondent, and the cases were ail considered together, in the counter affidavit of the Personnel Officer of the railway Held before this Court, in the writ petition, it was further alleged that at this point, the General Manager was advised to drop further proceedings initiated against the respondent and Bitters under the Railway Services (Safe guarding of National Security) Rules, 1949, but that action might be taken under rule 148 of the Indian Railway Establishment 'Code.
Thereupon, on 25-5j1959, the respondent was informed feat it was decided to drop the action initiated against him made the Railway Services (Safeguarding National security) ones and he was reinstated with immediate effect and directed to resume forthwith. The respondent's contention as that this order, purporting to be dated 25-5-1959, was received by his wife only on. 6-/-1959, and this is also admitted by the railway in their counter affidavit, immediately there followed a letter dated 14-7-1959, issued by the railway authorities which purported to terminate we session of the respondent in accordance with rule 148 or the Indian Railway Establishment Code with effect from 15-7-1959. There is some discrepancy between the case of the respondent and that of the department as to whether its the 'interregnum between 6-7-1959 and 14-7-1959, the 'respondent was allowed to join duty or not. The respondent's case is that when he reported for duty at Erode on 11/- 1S59 the foreman refused to entertain him. The department's version is that the foreman asked him to report for Duty the next day, but the respondent did not turn up. But material turns upon the determination of this controversy for the purpose of the present will The respondent's real grievance is that he was under suspension 'from 1-4-1948 till 25-5-1959, when the railway Minorities dropped the proceedings against him, and asked him to resume duty but during that period he was offered only a fraction of his salary and allowances. If the order restoring him to fluty was to be given full effect, he should been paid his full salary, emoluments, privileges and other benefits during the aforesaid period of suspension, unless the authorities make a specific order in that respect under Rule 2044 of the Railway Establishment Code referred to supra. But only a small amount as subsistence allowance and one month's pay in lieu of notice of termination of service, were sent to him by money order subsequently, and he refused to accept them, as it would prejudice his rights. The affidavit of the respondent went on to say that the above mentioned action of the railway authorities clearly proceeded on the basis that he was not entitled to his full salary, emoluments, etc., during the period mentioned above. Because of this, the order terminating his services was tantamount to removal or dismissal from service by way of punishment, against which he had not bean given an adequate opportunity to urge his defence and thereby Article 11(2) of the Constitution was violated. Resort to rule 148 of the Indian Railway Establishment Code was, in the above context, wholly unjustified and illegal.
2. In their counter affidavit, the railway administration admitted that after the termination of the respondent's services, they remitted to him one month's salary in lieu of 'notice, and also the subsistence allowance for the period of suspension according to the Railway rules in force, the respondent refused to receive the amounts. In other words, both at the time of the above remittance which was soon after the order terminating the respondent', services was passed by the railway, and also at the time when the railway filed a counter affidavit, to the writ petition, the respondent had specifically claimed that, though the order terminating his appointment purported to be one passed under rule .148 of the Indian, Railway Establishment Code, it was in substance a punishment, because if. had the consequence of making him forfeit his full salary and allowances for a long anterior period and this claim was not controverted by the department. But when the writ petition came up for hearing before Veeraswami J. learned counsel appearing for the railway made an admission than the railway authorities were liable to pay the full salary to the respondent from the date of his suspension to the date of the termination of his services. Veeraswami J. however was not prepared to act upon this admission made during the hearing of the arguments. Relying upon the absence of any denial in the counter affidavit, and on the conduct of the appellant right through from the date of the order of termination, in not making any whisper any where about their liability or willingness to pay the arrears of salary to the respondent, the learned judge came to the conclusion that the impugned order, was in effect the by way of punishment. Since admittedly the procedure under Article 311 of the Constitution was not followed; the learning Judge quashed the order of the General Manager, southern railway, Madras. It is against this decision that the Genera: Manager of the railway has fried the present appeal.
3. As already mentioned, the main facts of the case are not in controversy, except regarding the limited question whether during the short period between 6-7-1959 and 15-7-1959 the respondent joined duty or not. the order terminating the respondent services reads:
'As your services are no longer required by the rail way Administration, your services are, in accordance wits, rule 148 of the Indian Railway Establishment Code, Vol. I terminated with effect from the forenoon of 15-/-19S3. you will be paid one month's pay In lieu of notice of termination of your services due to you.
Prima facie the order was passed in pursuance of the right, which the railway undoubtedly possessed, to terminate the services of an employee after paying him one months salary in lieu of notice. If that order had stood by itself, there would be no grounds for attacking its validity, for non -compliance with: Article 311 of the Constitution. But in the context of the circumstances referred 10 above, it Will only proper to look at the ardor more carefully to the out its real purport and effect. The motive of the railway authority for applying Rule 148 of the Indian Railway Establishment Code to terminate an employee's services will no irrelevant. It is open to the railway to resort to rule 143, for terminating the services of an employee whose conduct is found unsatisfactory, or whose services would be prejudicial to the railway's interests. That rule empowers the railway, to terminate the 'employee's services without resorting to the elaborate procedure of framing a charge holding an enquiry and so on. At the same time, if the order, though purporting to be one under rule 148 of the Indian Railway Establishment Code, is in effect and substances an order of punishment, the question, will arise whether the aggrieved subordinate had an opportunity to defend himself under Article 311 of the Constitution.
In Shyamlal v. State of Utter Pradesh, : (1954)IILLJ139SC the question, was considered whether the termination of service, brought about by compulsory retirement was tantamount to dismissal or removal from service so as to attract the provisions of Article all of me Constitution, the Supreme Court held that the answer to the question will depend upon whether 'the nature and incidents of the action resulting in dismissal or removal, were to be found in the as one of compulsory retirement.' Applying that principle, the court will be justified in examining whether the nature and incidents of the action resulting in the termination of the respondent's services in this case are really those found in an order of punishment. Now as to what are the tests for an order of punishment, we have the ruling of the Supreme Court in its decision in Dalip Singh v. State of Punjab, : 1953CriLJ1465 .
'The first is whether the action is by way of punishment and to find that out the court said that it was necessary that a charge or imputation against the officer is made the condition of the exercise of the power, the second is whether by compulsory retirement the officer is losing the benefit he has already earned as he does by dismissal or removal.'
The latter of the above tests came in for application in Balakotaiah v. Union of India, : 1SCR1052 . That was a case dealing with a railway servant whose appointment was terminated under rule 148 in the context of the Railways Services (Safeguarding of national Security) Rules. it was observed in that case that there was no forfeiture or the benefits already accrued. No doubt in the statement of the facts in that case as found in the Supreme course Judgment, there is reference to the fact that lie was placed under suspension pending the enquiry, but it does not appear from the judgment, that the loss of full pay and allowances during the period of suspension was specifically considered as being in the nature of a penalty, visited upon the respondent.
The penal character of the loss of emoluments during the period of suspension, came up for specific consideration in Union of India v. Jeewanram, : AIR1958SC905 . in that case the order of termination of service was headed 'Notice of imposition of penalty of removal from service under item 8 of R.1702' and it also stated that the petitioner was deprived of half of his pay during the period of his suspension, and that the petitioner had a right or appeal. He was in fact deprived also of his dearness allowance and house rent allowance during the period or has suspension The order concluded by saying; that he was being given one month's pay in lieu of notice, of. from service in . such circumstances, the Supreme, held that the order of removal was a. penal; one and attracted the previsions of 3. 240(3) of the Government on India Act, 1935. In the court at their judgment, their tans. ships observed:
'Learned counsel for the appellant has drawn, a distinction between suspension as, a substantive punishment, and suspension pending an enquiry. That distinction, however ever, does not affect the question at issue. The only question before us is if the order dated 16-3.-1949' imposes penal consequences. It clearly does, because, it withholds part of the pay of the respondent during the, period of suspension.
4. The learned counsel for the appellant stress before fore us that the order in the present, case can be distinguished from that in : AIR1958SC905 ., because (i) it does, not purport to be an order of punishment (ii) it is side regarding the effect of the suspension, on, his pay and other allowances during the period of suspension, and than it refers simply to rule 148 of the Indian Railway Establishment Code. Therefore, it was urged that the court was not entitled to look beyond the order and find out what was, its real substance and effect'. With this, argument we are unable to concur. We have already referred to the observations in : (1954)IILLJ139SC that; the court is entitled to examine whether the nature and. incidents of the action, resulting in the dismissal, or removal from service, are to be found in the action of compulsory retirement. If the answer is in the affirmative it will -be a punishment. Again, even if the motive behind: the order terminating services under rule 148J, is to get rid of a bad servant or one whose work is unsatisfactory the order will be unassailable; but where such motive has been translated into a penal consequence in the action that led up to the actual termination of the service and where nothing is done thereafter to nullify the penal consequence, and the conduct of the railway indicates that they intended we penal consequence to remain, it would clearly he a cases where the Court is justified in looking, at the substance or the order apart from its form. In the Supreme court decision in Union of India, v. P. K. More, : (1961)IILLJ427SC , it was found that the refusal to pay the subsistence allowance had had no connection with, the termination of the employees service, and that the refusal was due to a misreading or the relevant rules. But no such claim is put forward here in extenuation of the penal part of the action: against the respondent, in withholding a part of the pay. during the period of suspension.
5. This court, in a case which came up before us very recently, W.A. No. 128 of 196Z (Mad) (from; the judgment of Jagadisan J. in W. P. 48/ of 1960) observed
'If the termination of an employee's services is Brought about otherwise than by way of punishment there the concerned Government servant cannot claim the protection of Article 311(2); but if on the contrary it was in effect a punishment then protection on under Art will avail.'
The Court also quoted with approval the view of J. in the judgment from which the: appeal was filed.-
'There can be no doubt that it is the substance that matters and not the form, and that a removal which is a punishment inflicted on a delinquent employee cannot be masked by the mere trick of the use of the expression 'termination','
The facts of the cased just cited are analogous to those in the present case. A charge of misconduct was trumpets against a railway servant and his explanation was for to show cause against removal from service. He was In the meantime placed under suspension. Then the ran way authority informed him that the charges were dropped, ; the order of interim suspension was cancelled and he was allowed to .join duty, immediately afterwards, he was served with another order stating that his services were no longer required by the administration and that they had Been terminated tinder rule 148. That order stated that he would be paid one month's pay in lieu of notice of termination and required him to vacate the railway quarters in ; his occupation. The order also required him to intimate his address in order to receive payment of his dues, certain amounts were paid by the railway administration in 'regard to the period of suspension, but the amount para am not include one increment which he had earned, mere was also a reduction of payment of average village allowance for the period of notice. This court here in such circumstances that the order or termination of the services, though it purported to be one . | passed under rule 148, was in substance by way of punishment and therefore it was necessary to follow the procedure under. 311(2) of the Constitution.
6. In the present case, the facts are even stronger than in the case dealt with in W. A. No. 128 of 1962 (Mad). Even after excluding the period when the respondent was under detention for security reasons when he could not employed after his release from detention in 1951 118 remained under suspension for eight years till 1959 when the Apartment informed him that he was restored to his appointment and that he could join duty. This order reached him on 6-7-1959, and then a few days thereafter on 14-7-1959, he was served with a notice of termination or His appointment. This order of termination of appointment and nothing to restore to him the loss of the emoluments during the period of suspension. When the claim was put crowed in the affidavit to the writ petition that the loss of 'emoluments amounted to a punishment, in its counter affidavit tile railway administration did not dispute the claim Only during the arguments in the High court when the writ petition came on for hearing learned counsel 'appealing for the railway offered to reimburse the respondent in full so as to remove all the vestiges of punishment Such an offer made for the first time during me to arguments in this court would hardly be of avail in such to context.
In a decision of a Bench of this court, of which one for us was a party in Union of India v. Daksmnathuram, : (1962)IILLJ96Mad , the order terminating the services of a railway servant stated that the railway was satisfied that he was guilty of the offence mentioned in the charge, but the order proceeded to terminate his services giving him one month's salary in lieu cat notice. it was observed that nothing was done by 'the order to nullify the effect of the order of suspension. 'this court held that the order must, under the circumstances, Be deemed to be one by way of punishment. the time of the hearing of that case learned counsel for the railway contended that the railway had been ready and willing to pay the arrears, but the offer came only at the time Of filing the written, statement. But in the present case the offer was not even made in the counter affidavit put was mafia only in the course of the arguments, in our view, that will not have any bearing upon the question of the penal effect of the order, which must be judged with reference to tire facts as they stood at or about the time he passing of the impugned order.
7. Before parting with this case, it appears to us that in similar cases, the railway administration will be well advised to make up their mind at a sufficiently early stage of the proceedings against a delinquent or unsatisfactory subordinate, regarding the proper way to deal with him, whether it should be by way of punishment, or by way of termination! of his service under rule 148. When they choose the first course, but in the middle of the proceedings thereunder, they change their mind and elect to follow the second course, it will be essential to see that no vestige is left of anything that can be construed as a punishment, and which can be substantially linked up with the order of termination of service under rule 148 passed under the second course. The railway authorities seem to have been aware that it is necessary to drop me Disciplinary proceedings undertaken for imposing a punishment, before they could resort to the alternative course or termination of services under rule 148 of the Indian Railway Establishment Code. This could be seen from the orders passed in this case and also in W. A. 128 of 1962 (Mad) just now cited where the railway dropped the disciplinary proceedings and restored the subordinate to his appointment. But they did nothing at the same time to nullify the effect of the order of suspension and the substantial loss of emoluments which the subordinates had suffered upto the time of restoration due to the action taken up to that time. Rule 2044 of the Indian Kanway Establishment Code, Vol. II, requires:-
'2044. Pay after re-instatement-When the suspension of a railway servant is held to have been unjustifiable or not wholly justifiable; or When a railway servant who has been dismissed, removed or suspended is reinstated; the revising or appellate authority may grant to him for the period of his absence from duty-
(a) if he is honourably acquitted, the full pay to which he would have been entitled if he had not been dismissed, removed or suspended and, by an order to be separately recorded, any allowance of which he was in receipt prior to his dismissal, removal, or suspension; or
(b) if otherwise, such proportion of such pay and allowances as the revising or appellate authority may prescribe.
In a case falling under clause (a), the period of absence from duty will be treated as a period spent on duty. In a case falling under clause (b), it will not Bb treated as a period spent on duty unless the revising or appellate authority so direct.'
It is clearly the duty of the railway, when they pass an order of reinstatement after a period of suspension, to come to a conclusion regarding the restoration to the affected subordinate of his full pay for the period of suspension. In this case, without choosing to exercise the power under rule 2044, of the Indian Railway Establishment Code, in regard to the loss of emoluments of the railway servant, immediately and almost before the ink had time to dry on the order of restoration to service, the railway exercised their power of termination of the; service of the respondent under rule 148. Even when the respondent refused to take the lesser emoluments offered to him, they were not prepared to exercise their power under rule 2044. Applying the principles extracted above, to the proceedings leading up to the termination of the appointment of the respondent, we are of the opinion that the order in substance is of a penal character, so as to attract Article 311(2) of the Constitution. We are of the opinion that the order of the learned judge is right, and we ors miss the appeal with costs.
8. We make a note however that the respondent who was a driver had practically ceased to hold this post for nearly 15 years. It is for the railway authorities to consider as to how far he can be entrusted with a driver's job after this long period that has elapsed.