The action that the disciplinary authority is to take on receipt of the Report of Inquiry Officer, and the different process intended for arriving at a final decision regarding punishment to be awarded to the delinquent officer are already discussed in detail in Chapter-2 earlier. What remains to be discussed is about the different punishments under major penalty inquiry.

Major penalties that can be inflicted on an officer of a public sector bank, after going through the different process of an oral inquiry are as under (PNB DA Regulation 4, sub-items (e) to (h).

1. reduction to a lower grade or post, or to a lower stage in a time scale;

2. Compulsory retirement

3. removal from service which shall not be a disqualification for future employment

4. dismissal which shall ordinarily be a disqualification for future employment

While dismissal and removal from service terminate the relationship existing between the employer and employee, reduction in rank does not end the contract but the terms of service are altered to the detriment of the employee by putting him to a lower grade or lower scale of pay or lower post. This punishment results in an immediate diminution of his current earnings. When the employee is given the punishment of 'reduction to a lower grade or post', the question of fitting him in the particular scale or grade becomes relevant. Normally the officer employee is awarded a reduction to the next immediate lower time-scale/grade. That is, if he is scale 2, he will be reverted to scale 1. If he was earlier working in scale I, and promoted his salary will be fitted, at the time-scale, which he would be drawing in case he was not originally promoted. But if the officer employee was directly appointed to Scale 2, the direct appointment will be deemed as having been made in Scale I for the purpose of fitting him in Scale -1. Thus if he was appointed in Scale -2 and has already put in 5 years service (secured 5 increments), he will be fitted in the 6th position in the time-scale of Scale I. However to reduce the gravity or effect of this punishment the order of reduction to a lower scale in such cases may specifically state the stage in the time scale (in terms of rupees) to which the employee is to be fitted.

Once it is decided to retain the officer employee in service, generally demoting him to a lower post, acts as a severe disincentive, and this may not be in the interests of either the officer or the employer. This punishment is therefore rarely awarded. Generally reduction of pay between 1 to 3 increments is awarded. Reduction beyond this level may appear to be harsh. The purpose of the punishment, in such a case is to act a shock treatment, and put in the mind of the officer employee a new thinking and perspective to mend himself. The effect of punishment should not linger for a long duration and opportunities should be provided to the officer employee to improve himself at the earliest and regain his original earnings.

Reduction on permanent basis should therefore be very rarely given. Effect of the punishment should normally be for a specified period and provision should be kept for the employee to regain the original position, he held before the punishment of reduction. When the employee is reduced to a lower post, care should be taken that the employee continues to perform the same type of work of a lower responsibility. Thus an officer should not be reduced by way of punishment and posted as a clerk.

Every order passed by a competent authority imposing on a Government Servant the penalty of reduction to a lower stage in a time-scale should indicate:-

1. the date from which it will take effect and the period(in terms of years & months) for which the penalty shall be operative;

2. the stage in the time scale (in terms of rupees) to which the Government servant is reduced; and

3. the extent (in terms of years and months), if any, to which the period referred to in item (i) above should operate to postpone future increments.

It should be noted that reduction to a lower stage in a time-scale is not permissible under the rules for an unspecified period or as a permanent measure. Also when a Government servant is reduced to a particular stage, his pay will remain constant at the stage for the entire period of reduction. The period to be specified under (iii) should in no case exceed the period specified under (i)

In order to achieve the objective of not allowing increments during the period of reduction, every order passed by a competent authority imposing on a Government servant the penalty of reduction to a lower stage in a time-scale should invariably specify that stage in terms of rupees to which the Government servant is reduced as in the following form:-

"The.........has decided that Shri............should be reduced to a pay of Rs.........for a period of.........with effect from........."
[Government of India, Ministry of Finance, Office Memorandum No.F.2(34)-E.III/59, dated
the 17th August 1959, 9th June 1960, and 24thJune, 1963]

It has been decided that in future while imposing the said penalty on a Government servant, the operative portion of the punishment order should be worded as in the form given below:

"It is therefore ordered that the pay of Shri...........be reduced by.......stages from Rs........to Rs........ in the time-scale of pay of...........for a period of......years/months with effect from ................ It is further ordered that Shri..............will/will not earn increments during the period of reduction and that on expiry of this period, the reduction will/will not have the effect of postponing his future increments of pay."
[Director General, Posts & Telegraphs, letter No.6/8/70-Disc.I, dated the 16th December, 1970]

Every order passed by a competent authority imposing on a Government servant the penalty of reduction to a lower service, grade or post or to a lower time-scale should indicate:-

1. the date from which it will take effect and in cases where the reduction is proposed to be imposed for a specified period, the period (in terms of years and months) for which the penalty shall be operative. It should be noted that the reduction may be for an unspecified or indefinite period and in cases where no period has been specified in the order of penalty is for an unspecified period.

2. The extent (in terms of years and months ), if any, to which the period referred to at (i) shall operate to postpone future increments on restoration after the specified period. The period specified under this sub-clause shall in no case exceed the period specified under sub-clause (i) above.
   [Govt. of India, Ministry of Finance, O.M.No.F.2(18)-E/61, dated the 7th May, 1961]

It has been decided in consultation with Ministries of Law and Finance that in future, an order imposing the penalty of reduction to a lower service, grade or post or to a lower time-scale should invariably specify-

1. the period of reduction, unless the clear intention is that the reduction should be permanent or for an indefinite period; and

2. Whether on such re-promotion, the Government servant will regain his original seniority in the higher service, grade or post of higher time-scale which has been assigned to him prior to the imposition of the penalty.

If the order of reduction is intended for an indefinite period the order should be framed as follows:-

"A is reduced to the lower post/grade/service of X until he is found fit by the competent authority to be restored to the higher post/grade/service of Y."

In cases where it is intended that the fitness of the Government servant for re-promotion or restoration in his original position will be considered only after a specified period, the order should be made in the following form:-

"A is reduced to the lower post/grade/service of X until he is found fit, after a period of.....years from the date of this order, to be restored to the higher post of Y "
[Govt. of India, Ministry of Home affairs O.M.No.9/13/62-Estt.(D), dated the 10th October, 1963
and No.30/63-Estt.(D), dated the 7th February, 1964]

Within the meaning of C.C.S.(C.C.A) Rules, a Government servant can be reduced to a lower post in another cadre to which he was not initially recruited. Limitation of a general nature have, however, to be observed in cases of reduction to a lower post, e.g. the lower post to which an official is reduced should also be within the control of the authority competent to pass the punishment orders or of an authority subordinate to him, the time scale to which an official is reduced should be one of the existing scales in the relevant office, Division etc. the duties of the lower post should be similar to those performed by the official in the higher post and the reduction should not be to a lower post of such a nature that it may not be possible for the official to regain his higher post if work and conduct later justified his promotion.
[Director General, Post & Telegraphs Letter No.,SPB III-9/49, dated the 8th December, 1949
in reply to letter No.SA/Y-12/90, dated 28-4-49 of PMG, Ambala]

The other three punishments results in termination of service, the mildest being 'compulsory retirement'. Compulsory retirement when awarded administratively, applying a rule in the contract service does not amount to a punishment. Thus while the employee is to retire at the age of 58 or 60 in the normal course, the employer through a provision in the service rules, which provide for review of the employee once or more than once, after he completes 25 years of service, and after such review, the employer may decide to compulsorily retire the employee. In such a case it is deemed as an administrative decision and not a punishment.

The quantum of punishment awarded to an employee, when his misconduct is proved in a departmental inquiry adopting due procedures, cannot be reviewed by a judicial authority. Hence the grievances of an employee that he has been awarded a very harsh punishment out of proportion to the gravity of the lapse, can be only redressed departmentally in appeals to an Authority authorised to hear such appeals. However this should not be taken as a ground for imposing a too severe punishment and inflict extreme harm to the employee.

Employees who are awarded the punishment of reduction should be provided due opportunities as needed like further training etc. to rehabilitate them to the original status, encouraging their own sincere efforts additionally in this direction. Such a punishment does not indicate that the employee concerned has become a persona non-gtratia (unwanted person).

In case of punishment of compulsory retirement, removal or dismissal, the dues of such employees should be expeditiously settled and these should not be allowed to prolong due to red-tape.