Section 294(7) in The Naval Ceremonial, Conditions Of Service And Miscellaneous Regulations, 1964
(7)Before a sailor is deprived of a Good Conduct Badge, the Captain must invariably ascertain whether he is due for the award of any badges, and if he is due, then the Captain should consider the award of the badges with reference to the sailor's conduct prior to the commission of the offence with which he has been charged. If the conduct of the sailor so merits, the Captain should award the Good Conduct Badge due. The question of deprivation of a badge or badges shall then be considered on the merits of the case.
