1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 811 -812 OF 2022

SUKHDARSHAN SINGH APPELLANT(S)

VERSUS

THE STATE OF PUNJAB & ORS. RESPONDENT(S)

J U D G M E N T

K.M. JOSEPH, J.

1. The appellant was appointed as a Clerk on 27.12.1979

by the State Transport Department. A criminal case (FIR)

came to be registered on 02.09.1986. The allegations

against him apparently pertained to alleged acts of

embezzlement. It was followed by a chargesheet on

06.10.1988. In connection with the said case, the appellant

came to be suspended w.e.f. 02.09.1986. While he was

undergoing suspension, yet another occurrence took place

which led to FIR No. 51/1995 being r egistered under

Sections 307 and 506 of the Indian Penal Code, 1860

(hereinafter referred to as ‘IPC’). The appellant came to

be convicted by the trial court with regard to FIR No.

51/1995 by judgment dated 17.09.1996. The appellant filed

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Criminal Appeal No. 703-SB/1996 against the conviction. The

appellant was convicted under Section 324 read with Section

506 of the IPC by the trial court.

2. After a period of six years, the appellant came to be

served with show cause notice dated 24.07.2002 under the

Punjab Civil Services (Punishment and Appeal) Rules, 1970

(hereinafter referred to as ‘1970 Rules’ for brevity). Rule

13 (i) of the ‘1970 Rules’ reads as follows:

"Special procedure in certain cases -Notwithstanding

anything contained in rules 8,9, 10, 11 and 12.

(i) Where any penalty is imposed on a Government

employee on the ground of conduct which has

led to his conviction on a criminal charge;

or

Provided that the Commission shall be

consulted, where such consultation is

necessary, before any orders are made in any

case under this rule.”

The appellant responded to the notice. However, by

order dated 13.03.2003, it was decided to remove the

appellant. To continue with the narrative, as regards the

first FIR relating to embezzlement, the Judicial Magistrate

acquitted the appellant by order dated 22.12.2006. The fate

of the criminal appeal against the judgment emanating from

FIR No.51/1995 was as follo ws:

The High Court sustained the conviction of the

appellant under Section 324 and Section 506 of the IPC.

However, it reduced the sentence under Section 324 to the

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period undergone and ordered a sentence of one month for

offence under Section 506. Thi s judgment was dated

09.04.2008.

3. The appeal preferred by the appellant against the

order dated 13.03.2003 came to be disposed of by order

dated 29.01.2009. By the said order, the appellate

authority found inter alia and ordered as follows:

“Section 307 IPC is not fallen under the definition

of “Mortal Turpitude. But the sections i.e., 324

and 506 of the case are very small and the simple

imprisonment. Therefore, it is abundantly and nor

this offence is fallen under the category of “Moral

Turpitude” and nor this case is belongs to

government proceedings. This personal dispute with

the appellant and on causing some simple injuries to

the other person by the appellant. The Hon’ble

Punjab and Haryana High Court, by reducing his

imprisonment, ha s dispensed with remaining

imprisonment, only after undergoing 39 days

imprisonment. The Hon’ble High Court has taken this

matter as sympathetically, therefore in view of the

above I, also by giving sympathy, is hereby set

asides the termination order and is hereby

punishment for the appellant that he will be not

given nothing for the suspension period and this

period will be declared as Dies -Non period. But

this order, this appeal is disposed off. ”

4. Being aggrieved by the order of the appellate

authority noting that the appellant will not be given

anything for the period of suspension and this period will

be declared as dies -non, a civil suit came to be instituted

on 09.12.2010 by the appellant. He sought a declaration to

the effect that the order dated 13.03.2003 and the

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appellate authority’s order dated 29.01.2009 to the extent

that the pay of the appellant was denied was illegal and

arbitrary and against the Rules and that he was entitled to

full pay for the period that he had been denied, the salary

and benefits. He sought mandatory injunction to release the

pay denied to him with 12 per cent interest. Upon contest,

the suit came to be decreed as follows:

“As per my sequel of discussion on Issue No. 1 to 4

discussed above, the suit of the plaintiff is decreed

to the effect that order dated 13.03.2003 and order

dated 29.01.2009/17.02.2009 to the extent whereby pay

of the plaintiff has been denied are illegal,

arbitrary and against the rules. However, it is made

clear that the plaintiff is entitled to ge t salary

which is denied by alleged orders but not of the

period during which the plaintiff and undergo

imprisonment. Decree sheet be prepared. File be

consigned to record room after due compliance.”

The appeal by the respondent -State was unsuccessful.

This led to the second appeal from which the present

appeals arise. The second appeal came to be allowed by the

High Court. In the original judgment, the High Court has

proceeded to find that the appellate authority has rightly

found that respondent is n ot entitled to monetary benefit

during the intervening period from the date of termination

till re-instatement having regard to the conviction, there

being modification only in sentence. It was found that only

a lenient view was taken by the appellate auth ority. It was

in these circumstances, relying on Rule 7.3 of Punjab Civil

Service Rules, hereinafter referred to as the ‘Rules’, the

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court found that the trial court and the appellate court

erred in not appreciating that the appellant was not

acquitted in the criminal case and also that Rule 7.3

empowered the competent authority to pass appropriate

order. Therefore, the second appeal was allowed setting

aside the judgments of the two courts.

In the review filed by the appellant from the

judgment, complaint of the appellant was that the court

erred in interpreting Rule 7.3 of the Rules. The

appellant’s case was that Punjab Roadways under which the

appellant was employed had adopted the 1970 Rules. The

appellant was placed under suspension in the FIR of the

year 1986 wherein he stood acquitted whereas the aforesaid

FIR was different from the later FIR pursuant to which he

has been convicted and therefore the question of treating

the suspension period as dies non, in the said case did not

arise. Appellant relie d upon Rules 5, 13 and 15 of the 1970

Rules. The learned Single Judge found that the appellant

continued under suspension till 13.3.2003. It is further

found that the appellate authority was entitled to regulate

the suspension period under rule 15(f) of t he 1970 Rules.

It was further found that in view of Rule 15(f) of the 1970

Rules and the order of suspension of 1988 not having been

challenged and it remained intact as on the date of removal

(13.3.2003), the review petition was allowed, to the extent

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of finding that a wrong provision, (Rule 7.3) was quoted in

the judgment which was sought to be reviewed. The

contention that dies non was impermissible because the

appellant was not placed under suspension with reference to

the later FIR, was not accepted as the respondent continued

to be under suspension.

It is feeling aggrieved by the original judgment

passed by the High Court allowing the second appeal and

also the order passed in review that the plaintiff is

before us by way of these appeals.

5. We have heard Shri Gurminder Singh, learned Senior

counsel appearing on behalf of the appellant and Shri D.S.

Patwalia, learned Advocate General appearing on behalf of

the respondent-State.

6. Learned senior counsel for the appellant would point

that once the H igh Court found that it was in error in

drawing support from Rule 7.3, it was in error in not

noticing that it overturned the premise for the judgment

allowing the second appeal. The judgment would have no legs

to stand on and therefore, the appeal filed by the State

ought to have been dismissed.

He would point out that Rule 7.3 indeed does not apply

as found by the High Court. As regards Rule 15(v)(f) of the

1970 Rules relied upon by the High Court, it is pointed out

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that it only provides for an ord er passed thereunder which

can lead to an appeal under the 1970 Rules. In this case,

learned senior counsel would reiterate the position which

has been accepted by the trial Court and the first

appellant Court that once the removal of the employee has

been found illegal and reversed, the employee is entitled

to get the wages or the salary for the entire period and it

is only this that has been done by the trial Court as also

the first appellate Court and there is no occasion for the

High Court to interfere thereunder.

Per contra, Shri D. S. Patwalia, learned Advocate

General for the respondent -State, would fairly submit that

no reliance could be placed on Rule 15 (v)(f) of the ‘1970

Rules’ in the manner done by the High Court. He did submit

that Rule 7.3 of the Rules was originally rightly applied.

He sought to draw support from Rule 7.3 -B. He would

highlight the fact that this is a case where the guilt of

the appellant was established before the trial Court

(conviction under Section 324 and Section 506 of the IPC)

and what is more, the appellate Court viz., the High Court

has confirmed the verdict. All that the High Court did was

it reduced the period of imprisonment as already noticed.

He would, therefore, point out that it is a case where the

appellant did not deserve to get anything more than what

was actually done by the appellate authority and it was for

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this reason that the respondents were prepared to accept

the order of the appellate authority as it is. He further

contended that the appellant would c ontinue under

suspension based on the earlier order of suspension.

FINDINGS

7. Admittedly, the appellant stood removed on 13.03.2003.

This was on the basis of a conviction by the Criminal Court

for offences under Section s 324 and 506 of the IPC. Again

undisputedly, in connection with another FIR, the appellant

was placed under suspension on 02.09.1986. His services was

terminated by removal by order dated 13.03.2003. It is this

order of removal which came to be interfered with by the

appellate authority on 2 9.01.2009. As noticed, the

appellate authority, however, directed that the appellant

will not be entitled to any salary for the period in

question and that it will be treated as dies non. It is

this which triggered the litigation in the civil Court and

we have noticed the decree which has been granted. The

civil Court has proceeded on the basis that once a

termination has been set aside, the employee must get full

salary without anything more. It is on this premise that

the trial Court and the first appella te Court have

proceeded to allow the suit filed by the appellant by

directing that subject to the exception, that for the

period of imprisonment he would not get the salary and

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other benefits, he would get the salary for the rest of the

period.

8. In this regard, Shri Gurminder Singh would point out

that there was no error committed by the Court for two

reasons. He would submit that once the appellate authority

found the termination flawed and appellant was to be

reinstated, clearly the appellate autho rity (in

disciplinary proceedings) exceeded the limits of its

authority in proceeding as if it could by the order deny

him the salary treating it as punishment. It is equally so

when the appellate authority ordered dies non. In this

regard, he drew our att ention to the penalties with which

an employee can be visited under the Rules viz., Rule 5 of

the ‘1970 Rules’. He would, therefore, point out that the

appellate authority was clearly acting illegally in

contemplating and providing for a punishment which i s not

within the four walls of the ‘1970 Rules’. Secondly, he

would support the order by pointing out that it is settled

law that once the termination is set aside, the employee

must get all the benefits.

9. We have perused the Rules which have been placed

before us. Rule 5 provides for the penalties with which

the employee can be visited with. The scheme of the Rules

further is that an appeal can be carried against certain

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orders which are mentioned in Rule 15. The manner in which

the appellate authority mu st exercise its appellate

jurisdiction is delineated in Rule 19.

10. The punishment as it is so described by the appellate

authority viz., depriving the salary and placing the

employee under dies non, do not appear to be penalties

provided in Rule 5. It was op en to the appellate authority

to enhance the punishment. The order, in other words, dated

29.01.2009 to the extent it became the subject matter of

the civil suit would appear to be beyond the power of the

appellate authority. To that extent, the appellant may be

justified in calling into question the direction to deny

him the salary by the appellate authority and treating it

as dies non as a punishment. It is not a penalty

contemplated in law. This, however, is not to be the end of

our enquiry.

11. The question would arise as to what is to be done with

regard to the period when the appellant was kept out of

service as a result of the proceedings against him. This,

in turn, must be broadly divided into two periods. An

employee may be kept out of service initial ly by way of an

order of suspension. The disciplinary proceedings may

culminate in an order of removal or dismissal or compulsory

retirement. The order of suspension would then come to an

end and it would merge in the order of removal interalia.

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After the order of removal inter alia till the order of

reinstatement based on relief granted to the employee, the

appellant would be out of service. According to Mr.

Gurminder Singh what Rule 7.3 contemplates is power with

the authority to provide for pay and allow ances for the

period the employee is kept out of service but limited to

the period prior to the dismissal. The relevant part of the

Rule 7.3 reads as follows:

“7.3. (1) When a Government employee, who has been

dismissed, removed or compulsorily retired, is

reinstated as a result of appeal, revision or review,

or would have been so reinstated but for his retirement

on superannuation while under suspension or not, the

authority competent to order re -instatement shall

consider and make a specific order –

(a) 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 hi s dismissal, removal or compulsory

retirement, as the case may be; and

(b) whether or not the said period shall be treated

as a period spent on duty.

(2) Where the authority competent to order re -

instatement is of opinion that the Government employee,

who had been dismissed, removed or compulsorily

retired, has been fully exonerated, the Government

employee shall, subject to the provisions of sub -rule

(6), be paid his full pay and allowances to which he

would have been entitled, had he not been dismissed,

removed or compulsorily retired or suspended, prior to

such dismissal, removal or compulsory retirement, as

the case may be:

Provided that where such authority is of opinion that

the termination of the proceedings instituted against

the Government employee had been delayed due to reasons

directly attributable to the Government employee it

may, after giving him an opportunity to make

representation and after considering the

representation, if any, submitted by him, direct, for

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reasons to be recorded in writing, that the Government

employee shall, subject to the provisions of sub -rule

(7), be paid for the period of such delay only such

amount (not being t he whole) of pay and allowances, as

it may determine.

(3) In a case falling under sub -rule (2), the period of

absence from duty including the period of suspension

preceding dismissal, removal or compulsory retirement,

as the case may be, shall be treated as a period spent

on duty for all purposes.

(4) In cases other than those covered by sub -rule (2)

including cases where the order of dismissal, removal

or compulsory retirement from service is set aside by

the authority exercising powers of appeal, revi sion or

review solely on the ground of noncompliance with the

requirements of clause (2) of article 311 of the

Constitution and no further inquiry is proposed to be

held, the Government employee shall, subject to the

provisions of sub -rules (6) and (7), be paid such

amount (not being the whole) of pay and allowances to

which he would have been entitled, had he not been

dismissed, removed or compulsorily retired or suspended

prior to such dismissal, removal or 106 [7.3] THE

PUNJAB CIVIL SERVICES RULES VOLUME I (PART I) [Chap.

VII] compulsory retirement, as the case may be, as the

competent authority may determine, after giving notice

to the Government employee of the quantum proposed and

after considering the representation, if any, submitted

by him in that connection within such period as may be

specified in the notice:

Provided that any payment under this sub -rule to a

Government employee other than a Government employee

who is governed by the provisions of the payment of

Wages Act, 1936 (Act 4 of 1936) sha ll be restricted to

a period of three years immediately preceding the date

on which order for re -instatement of such Government

employee are passed by the authority exercising the

powers of appeal, revision or review, or immediately

preceding the date of r etirement on superannuation of

such Government employee, as the case may be.

(5) In a case falling under sub -rule (4), the period of

absence from duty including the period of suspension

preceding his dismissal, removal or compulsory

retirement, as the ca se may be, shall not be treated as

a period spent on duty, unless the competent authority

specifically directs that it shall be so treated for

any specified purpose:

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Provided that if the Government employee so desires

such authority may direct that the p eriod of absence

from duty including the period of suspension preceding

his dismissal, removal or compulsory retirement, as the

case may be, shall be converted into leave of any kind

due and admissible to the Government employee.

Note. –The order of the c ompetent authority under the

preceding proviso shall be absolute and no sanction of

the higher authority shall be necessary for the grant

of–

(a) extraordinary leave in excess of three months in

the case of a temporary Government employee; and

(b) leave of any kind due in excess of five years in

the case of a permanent and quasi permanent

Government employee.

(6) The payment of allowances under sub -rule (2) or

sub-rule (4) shall be subject to all other conditions

under which such allowances are admissib le.

(7) The amount determined under the proviso to sub -rule

(2), or under sub -rule (4) shall not be less than the

subsistence allowance and other allowances admissible

under rule 7.2.

(8) Any payment made under this rule to a Government

employee on his reinstatement, shall be subject to

adjustment of the amount, if any, earned by him through

an employment during the period between the date of

removal, dismissal or compulsory retirement, as the

case may be, and the date of reinstatement. Where the

emoluments admissible under this rule are equal to or

less than the amounts earned during the employment

elsewhere nothing shall be paid to the Government

employee.

Note 1.–This rule is absolute and unconditional and so

the question of lien does not arise in t he case of a

Government employee who is dismissed from service and

is reinstated on appeal, revision or review when the

period of unemployment between the date of dismissal

and reinstatement is declared by the authority

exercising the powers of appeal, rev ision or review as

the period spent on duty.

Note 2.–Clause (b) of sub -rule (1) of this rule does

not forbid the period spent under suspension being

treated as leave, and it is open to the authority

exercising the powers of appeal, revision or review to

specify the proportion of pay and allowances to be paid

as the leave salary which would be permissible, if the

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Government employee were on leave.

Administrative Instruction. –A permanent post vacated

by the reason of dismissal, removal or compulsory

retirement of a Government employee should not be

filled substantively until the expiry of a period of

one year from the date of such dismissal, removal or

compulsory retirement. Where, on the expiry of the

period of one year, the permanent post is filled and

the original incumbent of the post is reinstated

thereafter, he should be accommodated against any post

which may be substantively vacant in the gra de to which

his previous substantive post belonged. If there is no

such vacant post, he should be accommodated against a

supernumerary post which should be created in that

grade with proper sanction and with the stipulation

that it would terminate on the o ccurrence of the first

substantive vacancy in that grade.

Note 3.–If no order is passed under sub -rule (5),

directing that the period of absence be treated as duty

for any specified purpose, the period of absence should

be treated as 'non -duty'. In such event, the past

service (i.e., service rendered before dismissal,

removal, compulsory retirement) will not be forfeited.

Note 4. –There is no bar to the conversion of any

portion of a period of suspension into extraordinary

leave. In the case of persons w ho are not fully

exonerated, the conversion of the period of suspension

into leave with or without allowances has the effect of

removing the stigma of suspension and all the adverse

consequences flowing therefrom. The moment the period

of suspension is con verted into leave, it has the

effect of vacating the order of suspension, and it will

be deemed not to have been passed at all. Therefore, if

it is found that the total amount of subsistence and

compensatory allowances that an officer received during

the period of suspension exceeds the amount of leave

salary and allowances, the excess will have to be

refunded and there is no escape from this conclusion.”

12. Rule 7.3A deals with pay and allowances where the

dismissal, removal or compulsory retirement is set aside by

a court of law and such employee is reinstated without

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holding any further inquiry.

The relevant part of Rules 7.3 (B) reads as follows: -

“7.3-B. (1) When a Government employee who has been

suspended is reinstated or would have been so re-

instated but for his retirement on superannuation while

under suspension the authority competent to order re -

instatement shall consider and make a specific order –

(a) regarding the pay and allowance to be paid to the

Government employee for the period of suspension ending

with re-instatement or the date of his retirement on

superannuation, as the case may be; and

(b) whether or not the said period shall be treated as

a period spent on duty.

(2) Notwithstanding anything contained in rule 7.3 or

rule 7.3-A, where a Government employee under

suspension dies before the disciplinary or court

proceedings instituted against him, are concluded, the

period between the date of suspension and the date of

death shall be treated as spent on duty for all

purposes and his family shall be paid the full pay and

allowances for that period to which he would have been

entitled, had he not been suspended, subject to

adjustment in respect of subsistence allowance already

paid.

(3) Where the authority competent to order re-

instatement is of opinion that the suspension was

wholly unjustified, the Government employee shall,

subject to the provisions of sub -rule (8), be paid the

full pay and allowances to which he would have been

entitled, had he not been suspended:

Provided that where such authority is of opinion that

the termination of the proceedings instituted against

the Government employee, had been delayed due to

reasons directly attributable to the Government

employee, it may, after giving him an opportunity to

make his representation and after considering the

representation, if any, submitted by him, direct, for

reasons to be recorded in writing, that the Government

employee shall be paid for the period of such delay

only such amount (not being the whole) of su ch pay and

allowances as it may determine.

(4) In a case falling under sub -rule (3), the period of

suspension shall be treated as a period spent on duty

for all purposes.”

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13. If we take up Rule 7.3 -B relied upon by the learned

Advocate General, it gives u s the impression that its

intent is to deal with cases where a person is placed under

suspension but thereafter reinstated. ‘Conspicuous by its

absence’ in Rule 7.3B are expressions indicating that apart

from suspension, the matter progressed to a stage wh ere the

employee came to be visited with any penalties. In other

words, there can be cases where a person may be placed

under suspension and without the matter progressing

further, the authority in its discretion and power decides

to revoke the suspension and he is reinstated. Rule 7.3, on

the other hand, deals squarely with the situation where the

employee whose services are terminated succeeds in an

appeal or other remedy and there is an order of

reinstatement and a question arises as to how the period

prior to his dismissal is to be reckoned. The orders which

can be passed are expressly provided for therein. In other

words, the scheme of the Rules would appear to be that when

an employee who has been proceeded against, succeeds before

the higher forum, th e question as to what is to be done for

the period when he was kept out of service would have to be

determined in the manner provided therein.

14. Rule 15(v)(f) has been noticed by the High Court to

find that there was power with the authority. Rule 15(v)(f)

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reads as follows:

“15. Order against which appeal lies - Subject to the

provision of Rule 14 a Government employee may prefer

an appeal against all or any of the following orders,

namely-

…………………………………………………………………………………………………………….

………………………………………………………………… ………………………………………….

(v) an order-

…………………………………………………………………………………………………………….

…………………………………………………………………………………………………………….

(f) determining whether or not the period from the

date of his suspension or from the date of his

dismissal, removal, compulsory retire ment or reduction

to a lower service, grade, post, time scale of pay or

stage in a time scale of pay to the date of his

reinstatement or restoration to his service, grade or

post shall be treated as a period spent on a duty for

any purpose.

15. Rule 15(v)(f) indeed contemplates that when there is a

dismissal, removal, compulsory retirement or reduction to a

lower service inter alia and there is an order of

reinstatement, the authority is to pass an order as to

whether the period from the date of suspension or from the

date of his dismissal, removal or compulsory retirement

till the date of his reinstatement, is to be treated as a

period spent on duty for any purpose. This gives a clear

indication that upon an order being passed by the appellate

authority finding the termination of employee to be illegal

and leaves it there, it would not ipso facto inevitably

follow that the employee will become entitled to claim the

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salary for the entire period consequent upon his being

found to be entitled to rein statement. This is a matter for

the authority to decide.

16. In such circumstances, in our view, the proper order

to be passed would be to find as follows:

(1) The decree of the trial Court as confirmed by the

first appellate Court is to be sustained viz., we

find that the first appellate authority in

proceeding to impose the condition that the

appellant will not be entitled to any salary for the

period and that it will be treated as dies non

cannot be sustained.

(2) However, the further direction by the decree passed

by the trial Court and confirmed by the first

appellate authority that the appellant will be

entitled to the salary for the period he was kept

out of service also cannot be sustained.

(3) Insofar as the High Court has not noticed these

aspects while allowing the appeal and dismissing the

review petition, we are of the view that the

impugned judgment also cannot be sustained.

17. Accordingly, we dispose of the appeals by setting

aside the impugned judgment and modifying the judgment

passed by the first appellate Court and set aside the

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decree passed by the trial Court directing payment of

salary to the appellant for the period that he was kept out

of service.

There will be a decree directing the second respondent

to consider as to how the period ti ll the appellant was

reinstated is to be treated and consequential effect

thereof. In other words, the question will be as regards

the period from 13.03.2003 till 20.03.2009. This exercise

will be undertaken and concluded within a period of three

months from today.

Parties are directed to bear their respective costs.

The civil appeals are allowed as above.

…………………………………………………………………., J.

[K.M. JOSEPH ]

…………………………………………………………………., J.

[HRISHIKESH ROY ]

New Delhi;

March 03, 2022.