( 1 ) THE petitioner-State of Gujarat has challenged in this petition filed under Articles 226 / 227 of the constitution of India the impugned judgment and order dated 7. 12. 1993 passed by the Gujarat Civil Services tribunal, Gandhinagar (for short "the Tribunal") partly allowing the Appeal No. 167/93 filed by the respondent-original appellant before it whereby the learned Tribunal interfered with the order of penalty imposed against the respondent-original appellant and reduced the penalty from dismissal to reducing to a lower stage in time scale of pay which the petitioner was getting on the date of his suspension for a period of 5 years with a direction that he shall not earn any increment of pay during the period of such reduction and with further direction that on the expiry of such period of 5 years the reduction will not have the effect of postponing the further increment of pay.

( 2 ) THE respondent-original appellant had joined service in the Revenue Department on 8. 11. 1965. In 1985 he was deputed as Godown Manager at Dahod in Panchmahals district under Gujarat State Civil Supplies Corporation ltd. There was a joint checking of stock in godown done by representatives of the District Supply Board and the chartered Accountant on 30. 9. 1987. On that day no deficit in the stock was found, but between the period of 1. 10. 1987 and 6. 10. 1987, a deficit of 103. 44 kgs. of palmoline oil worth Rs1,22,059. 20 was found. The stock of the palmoline oil was sold by the present respondent-appellant Mr. Ashokukar Shantilal Doshi in black market and thereby he misappropriated public money of Rs. 1,22,059. 20. This was detected on 6. 10. 1987 by the district Supply Officer when he had gone for surprise checking at Dahod godown with other officers when the respondent-original appellant was in-charge of the godown. It is to be noted that on 9. 11. 1987 the respondent-appellant had deposited the said amount of rs. 1,22,059. 20, which was misappropriated by him. Apart from this it was found that 55 empty barrels of palmoline oil were also found in excess and there was a deficit of seven empty tins of 15 Kgs. for which panchnama was made. Thereafter, on finding these irregularities, the district Supply Officer had recorded the statement of the present respondent-original opponent and other staff members of the godown. Show cause notice dated 20. 10. 1987 was issued to the present respondent, which was replied by him on 28. 10. 1987. It was for the first time he came out with a case that shortage in palmoline oil was due to leakage in the barrels. He has also come out with a case that he had later on deposited an amount of Rs. 1,22,059. 20 under protest. Departmental proceedings were initiated against him in November, 1987 and thereafter he was placed under suspension on 10. 12. 1987. Thereafter he was served with charge sheet dated 15. 12. 1987 which was denied by reply dated 16. 5. 1988. On 16. 1. 1999 inquiry was entrusted to the special Officer for departmental inquiry at Vadodara, who by his report dated 24. 12. 1991 found the respondent guilty for the charge Nos. 1 and 2, but did not find him guilty for the remaining charges. After receiving the report, he was served with show cause notice dated 28. 4. 1992 calling upon him to show cause as to why he should not be dismissed from service. He submitted his reply dated 3. 8. 1992 to the said show cause notice. After considering his reply his services were terminated by impugned order dated 20. 12. 1992. Aggrieved of this order of termination he approached the learned Tribunal by way of Appeal No. 167/93 which was partly allowed and penalty of dismissal was reduced to penalty of reduction in pay scale. The same is challenged in this petition.

( 3 ) LEARNED AGP, Mr. Dave for the State of Gujarat vehemently submitted that once the respondent was found guilty for serious charges then it was not open to the learned Tribunal to interfere with the order of penalty and red