RSA-758-2006 (O&M) IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Pepsu Road Transport Corporation Balwinder Singh CORAM: HON'BLE MR. JUSTICE Present: Ms. for the appellants None ***** HARKESH MANUJA J. (Oral) 1. The appellants appeal, challenge has been laid to the judgment and decree dated 12.09.2005 passed by the learned Civil Judge (Senior Division), Bathinda (hereinafter referred to as the declaration filed at the instan and the judgment and decree dated 10.11.2005 passed by the learned Additional District Judge (Adhoc), Fast Track Court, Bathinda (hereinafter referred to as the decree of the learned Trial Court. For the convenience of this Court, the parties are being referred to as per their status in the suit. FACTS 2. Briefly stating, Conductor with the appellant promoted as Adda Conductor on 16.01.1978 and thereafter as Sub (O&M) IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Pepsu Road Transport Corporation & anr. vs. der Singh HON'BLE MR. JUSTICE HARKESH MANUJA Devyani Sharma for for the appellants-defendants. None for the respondent-plaintiff. ***** HARKESH MANUJA J. (Oral) The appellants-defendants are in appeal. appeal, challenge has been laid to the judgment and decree dated 9.2005 passed by the learned Civil Judge (Senior Division), Bathinda (hereinafter referred to as the “Trial Court” filed at the instance of the respeondent and the judgment and decree dated 10.11.2005 passed by the learned Additional District Judge (Adhoc), Fast Track Court, Bathinda (hereinafter referred to as the “First Appellate Court” decree of the learned Trial Court. For the convenience of this Court, the parties are being referred to as per their status in the suit. FACTS Briefly stating, the respondent Conductor with the appellant-Corporation on 15. promoted as Adda Conductor on 16.01.1978 and thereafter as Sub IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA-758-2006 (O&M) Decided on:- 13.07.2026 ....Appellants. ....Respondent. HARKESH MANUJA defendants are in appeal. By way of present appeal, challenge has been laid to the judgment and decree dated 9.2005 passed by the learned Civil Judge (Senior Division), Bathinda “Trial Court”) whereby, the suit for respeondent-plaintiff was decreed and the judgment and decree dated 10.11.2005 passed by the learned Additional District Judge (Adhoc), Fast Track Court, Bathinda (hereinafter “First Appellate Court”) affirmed the judgment and decree of the learned Trial Court. For the convenience of this Court, the parties are being referred to as per their status in the suit. the respondent-plaintiff was appointed as Corporation on 15.06.1968. He was promoted as Adda Conductor on 16.01.1978 and thereafter as Sub By way of present appeal, challenge has been laid to the judgment and decree dated 9.2005 passed by the learned Civil Judge (Senior Division), Bathinda ) whereby, the suit for ecreed and the judgment and decree dated 10.11.2005 passed by the learned Additional District Judge (Adhoc), Fast Track Court, Bathinda (hereinafter ) affirmed the judgment and decree of the learned Trial Court. For the convenience of this Court, the plaintiff was appointed as 6.1968. He was promoted as Adda Conductor on 16.01.1978 and thereafter as Sub SANJAY GUPTA 2026.07.21 16:52 I attest to the accuracy and integrity of this document RSA-758-2006 (O&M) Inspector on 04.02.1992. He got voluntary retirement from the post of Sub Inspector on 31.07.2000. The plea set up by plaintiff before the learned Trial Court was that in terms of the recommendations of the Fourth Punjab Pay Commission, an employee who renders the service of eight years on the same post/cadre without being promoted to the next higher level, on account of non-availability of a vacancy or non-existence of a promotional avenue, is entitled to be granted a "proficiency step-up", which is, placement in the next higher pay scale with consequential benefits of arrears of pay, difference of gratuity, difference of computed pension and refixation of pension, together with interest at 18% per annum. Since the plaintiff rendered more than eight years of service as Sub Inspector prior to his retirement, he claimed entitlement to this benefit w.e.f. 04.02.2000. Despite representations and registered legal notice, the appellant- Corporation did not extend the said benefit, leading to the institution of the suit. 3. Upon notice, the appellants-defendants appeared and filed their written statement, taking preliminary objections regarding maintainability, locus standi, and non-compliance with Order 6 Rule 15(4) and Order 7 Rule 11 CPC. On merits, the plaintiff's appointment, promotions, or the date of retirement was not disputed. It was further admitted that under the applicable rules, an employee completing the service of eight years in the same cadre is, in principle, entitled to the proficiency step-up. Their defence was confined to the plea that the plaintiff was ineligible for the benefit because his work and conduct during the relevant period were not satisfactory. It was further averred that Annual Confidential Reports (for short “ACRs”) of the plaintiff were mostly graded "average" and under Punjab Government Circular No. 7/37/98-5PP- SANJAY GUPTA 2026.07.21 16:52 I attest to the accuracy and integrity of this document RSA-758-2006 (O&M) 1/12851 dated 25.9.1998, the benefit could be granted only where the employee's "overall service record" was adjudged "Good", meaning that at least 50% of the ACRs, including at least two of the last three reports, had to be graded "Good”. Thus, the plaintiff was not entitled to any benefits claimed by him. 4. On the basis of pleadings of the parties, the following issues were framed by the learned trial Court: “(i) Whether the suit of the plaintiff is entitled to the relief of declaration? OPP (ii) Whether the plaintiff has no locus standi and cause of action to file the suit? OPD (iii) Whether the suit of the plaintiff is not maintainable in the present form? OPP (iv) Whether the suit of the plaintiff is bad for non- compliance with Order 6 Rule 15(4) CPC? OPD (v) Whether the suit of plaintiff is bad for non-compliance with Order 7 Rule 11 CPC? OPD (vi) Relief. ” 5. The learned Trial Court vide judgment and decree dated 12.09.2005 decreed the suit filed at the instance of plaintiff while holding the plaintiff entitled to the proficiency step up w.e.f. 04.02.2000 with all other benefits. 6. Aggrieved of the judgment and decree passed by the learned trial Court, the appellant-PEPSU filed the first appeal, however, the same was dismissed vide judgment and decree dated 10.11.2005 passed by the learned First Appellate Court, affirming the decision of the learned Trial Court. Hence, the present Regular Second Appeal. CONTENTION(S): ON BEHALF OF THE APPELLANT(S)-DEFENDANT(S): SANJAY GUPTA 2026.07.21 16:52 I attest to the accuracy and integrity of this document RSA-758-2006 (O&M) 7. Learned counsel for the appellants submits that the learned Courts below have committed an error in law and on facts in decreeing the suit. It is submitted that the grant of proficiency step-up is not automatic upon completion of the service of eight years but is conditional upon the overall service record of the employee being adjudged "Good" in terms of the circular dated 25.09.1998. The aforesaid circular required at least 50% of the ACRs, including two of the last three, to be graded "Good", however, the admitted ACR record of the plaintiff being average for most of the relevant years, fell short of this threshold. Thus, in light of the policy and relevant rules and regulations, the plaintiff was not entitled to any benefit, the findings of the learned Courts below being erroneous in law were to be set aside and the present appeal was to be allowed. 7.1 No one has appeared on behalf of respondent- plaintiff. DISCUSSION AND REASONING: 8. I have heard learned counsel for the appellant and gone through the paper book. I do not find any substance in the submissions made on behalf 9. A perusal of the record shows that it is not disputed that the respondent-plaintiff was appointed as conductor on 15.06.1968 and promoted as Adda conductor on 16.01.1978 and thereafter as Sub Inspector on 04.02.1992. He took voluntary retirement on 31.07.2000, thereby, completing the service of eight years in the same cadre. It was admitted in the written statement filed by the appellants-defendants that the plaintiff was, in principle, entitled under the rules to proficiency step-up upon completion of the service of eight years in the same cadre, however, the same was subjected to conditions prescribed under the relevant rule. For adjudicating upon the issue of the entitlement to the proficiency step SANJAY GUPTA 2026.07.21 16:52 I attest to the accuracy and integrity of this document RSA-758-2006 (O&M) up, it would be relevant to peruse the Punjab Government Circular letter No. 7/37/98-5PP-1/12851 dated 25.09.1998 which is extracted hereunder:- “Placement in higher scale and proficiency step up under this policy shall be granted only to those employees whose overall service record is adjudged as 'Good'. If a department test is prescribed or acquisition of higher qualification is a pre-requisite for promotion to the test or acquire such higher level qualification would be eligible for benefit under this scheme. Doubts have been expressed by some quarters about the term overall service record is adjudged as 'good' and have about this term. This matter has been considered in consultation with the Department of Finance and it is clarified that the term overall service record is adjudged as Good will mean that 50% reports should be good and above, including atleast two of the last three reports. The rest of the reports may be satisfactory/average.” A perusal of the above circular shows that for grant of the proficiency step up, the employee's overall service record over the qualifying period of eight years must be adjudged "Good". As clarified in the circular, this requires at least 50% of the ACRs to be graded "Good", including at least two of the last three reports; the remaining reports may be "satisfactory" or "average". 10. Before this Court delves into the question whether the above circular applies to the facts of the present case, or whether the requirements thereunder stand fulfilled, it has come on record that the ACRs were not communicated to the plaintiff. As claimed in the written statement, the appellant asserted that the plaintiff's ACRs were "mostly average" and that his service record was "not so good". Since the ACRs SANJAY GUPTA 2026.07.21 16:52 I attest to the accuracy and integrity of this document RSA-758-2006 (O&M) so relied upon carried adverse remarks against the respondent-plaintiff, the same ought to have been communicated to him so that he could plead his case before the competent authority, and the concerned authority would have given him an opportunity to represent against the adverse assessment. Only thereafter could he have been held ineligible for the proficiency step-up relying on the said ACRs. The rationale underlying the requirement of communication is that an employee ought not to be condemned unheard on the strength of an assessment he had no opportunity to know of or answer is a facet of fair play in service jurisprudence. My aforesaid view is also derived from the observations made by Hon’ble Apex Court in Union of India v. E.G. Nambudiri 1991 SCC (L&S) 813 and Dev Dutt v. Union of India 2008(8) SCC 725 wherein it was held that an entry, unless communicated to the employee concerned, so as to afford him an opportunity to explain or represent against it, cannot be relied upon to his detriment. Non-communication of an entry, by itself, renders the assessment arbitrary and violative of the principle of fairness underlying natural justice. The relevant portion of E.G. Nambudiri’s case (supra) and Dev Dutt’s case (supra) is extracted hereunder:- E.G. NAMBUDIRI’S CASE “6. Entries made in the character roll and confidential record of a Government servant are confidential and those do not by themselves affect any right of the Government servant, but those entries assume, importance and play vital role in the matter relating to confirmation, crossing of efficiency bar, promotion and retention in service. Once an adverse report is recorded, the principles of natural justice require the reporting authority to communicate the same to the Government servant to enable him to improve his SANJAY GUPTA 2026.07.21 16:52 I attest to the accuracy and integrity of this document RSA-758-2006 (O&M) work and conduct and also to explain the circumstances leading to the report. Such an opportunity is not an empty formality, its object, partially, being to enable the superior authorities to decide on a consideration of the explanation offered by the person concerned, whether the adverse report is justified. The superior authority competent to decide the representation is required to consider the explanation offered by the Government servant before taking a decision in the matter. Any adverse report which is not communicated to the Government servant, or if he is denied the opportunity of making representation to the superior authority, cannot be considered against him…...” DEV DUTT’S CASE “19. In our opinion, every entry in the A.C.R. of a public servant must be communicated to him within a reasonable period, whether it is a poor, fair, average, good or very good entry. This is because non- communication of such an entry may adversely affect the employee in two ways : (1) Had the entry been communicated to him he would know about the assessment of his work and conduct by his superiors, which would enable him to improve his work in future (2) He would have an opportunity of making a representation against the entry if he feels it is unjustified, and pray for its upgradation. Hence non- communication of an entry is arbitrary, and it has been held by the Constitution Bench decision of this Court in Maneka Gandhi v. Union of India (supra) that arbitrariness violates Article 14 of the Constitution. 20. Thus it is not only when there is a bench mark but in all cases that an entry (whether it is poor, fair, average, good or very good) must be communicated to a public servant, otherwise there is violation of the principle of fairness, which is the soul of natural justice. Even an outstanding entry should be SANJAY GUPTA 2026.07.21 16:52 I attest to the accuracy and integrity of this document RSA-758-2006 (O&M) communicated since that would boost the morale of the employee and make him work harder.” 11. Since the appellant-Corporation's own case is that the benefit was denied because of the quality of the plaintiff's service record as reflected in the ACRs, and they were never able to prove that the same were ever communicated to him, the learned Courts below cannot be faulted for holding that such uncommunicated remarks could not be relied upon to defeat the plaintiff's claim. Moreover, it is pertinent to note that despite specific pleadings in the written statement asserting that the plaintiff's ACRs were "mostly average" and that his service record was "not so good", the appellant-Corporation neither produced the whole record themselves before the learned Trial court nor led any evidence beyond the inquiry report (Ex.DA). The burden of proving the factual foundation for the plea of ineligibility, a matter squarely within the special knowledge and custody of the appellant-Corporation, was not discharged. Thus, the concurrent findings of the Courts below denying the appellant- Corporation's plea of ineligibility does not warrant any interference in second appeal. 12. In view of the discussion made hereinabove, finding no illegality or perversity with the findings of the fact recorded by the learned First Appellate Court, there being no misreading or any mis-interpretation of the pleadings and the evidence available on record; the present appeal, being devoid of merits, is hereby dismissed, and the judgments and decrees dated 12.09.2005 and 10.11.2005 passed by the learned Courts below in favour of the respondent-plaintiff are hereby affirmed. 13. Pending application(s), if any, also stand disposed of. 14. The Secretary, District Legal Services Authority, Bathinda is SANJAY GUPTA 2026.07.21 16:52 I attest to the accuracy and integrity of this document RSA-758-2006 (O&M) requested to supply copy of this order to the respondent against acknowledgement and also inform him about the decision of this appeal. 13.07.2026 (HARKESH MANUJA) sanjay JUDGE Whether speaking/reasoned: Yes/No Whether reportable: Yes/No SANJAY GUPTA 2026.07.21 16:52 I attest to the accuracy and integrity of this document