Government has no power to withhold Pensionary Benefits if departmental or judicial proceeding are pending: Supreme Court
C.A. No.6770/2013 @ SLP (C) No. 1427 of 2009
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6770 OF 2013
(Arising out of Special Leave Petition (Civil) No. 1427 of 2009)
State of Jharkhand & Ors. ---- Appellant(s)
Vs.
Jitendra Kumar Srivastava & Anr. --- Respondent(s)
WITH
C.A. No. 6771/2013
(arising out of SLP(C) No. 1428 of 2009)
J U D G M E N T
A.K. Sikri, J
1. Leave granted. pensionary
2.
Crisp and short question which arises for consideration in these cases
is as to whether, in the absence of any provision in the Pension Rules,
the State Government can withhold a part of pension and/or gratuity
during the pendency of departmental/ criminal proceedings? The High
Court has - answered this question, vide the impugned judgment, in the
negative and hence directed the appellant to release the withheld dues
to the respondent. Not happy with this outcome, the State of Jharkhand
has preferred this appeal.
3. For the sake of convenience we will
gather the facts from Civil Appeal arising out of SLP(Civil) No. 1427 of
2009. Only facts which need to be noted, giving rise to the aforesaid
questions of law, are the following:
The respondent was working in
the Department of Animal Husbandry and Fisheries. He joined the said
Department in the Government of Bihar on 2.11.1966. On 16.4.1996, two
cases were registered against him under various Sections of the Indian
Penal Code as well as Prevention of Corruption Act, alleging serious
financial irregularities during the years 1990-1991, 1991-1992 when he
was posted as Artificial Insemination Officer, Ranchi. On promulgation
of the Bihar Reorganisation Act, 2000, State of Jharkhand (Appellant
herein) came into existence and the Respondent became the employee of
the appellant State. Prosecution, in respect of the aforesaid two
criminal cases against the respondent is pending. On 30th January, 2002,
the appellant also ordered initiation of disciplinary action against
him. While these proceedings were still pending, on attaining the age of
superannuation, the respondent retired from the post of Artificial
Insemination Officer, Ranchi on 31.08.2002. The appellant sanctioned the
release and payment of General Provident Fund on 25.5.2003. Thereafter,
on 18.3.2004, the Appellant sanctioned 90 percent provisional pension
to the respondent. Remaining 10 percent pension and salary of his
suspension period (30.1.2002 to 30.8.2002) was withheld pending outcome
of the criminal cases/ departmental inquiry against him. He was also not
paid leave encashment and gratuity.
4. Feeling aggrieved with
this action of the withholding of his 10 percent of the pension and
non-release of the other aforesaid dues, the respondent preferred the
Writ Petition before the High Court of Jharkhand. This Writ Petition was
disposed of by the High Court by remitting the case back to the
Department to decide the claim of the petitioner for payment of
provisional pension, gratuity etc. in terms of Resolution No. 3014 dated
31.7.1980. The appellant, thereafter, considered the representation of
the respondent but rejected the same vide orders dated 16.3.2006. The
respondent challenged the rejection by filing another Writ Petition
before the High Court. The said petition was dismissed by the learned
Single Judge. The respondent filed C.A. No.6770/2013 @ SLP (C) No. 1427
of 2009 Intra Court Appeal which has been allowed by the Division Bench
vide the - impugned orders dated 31.10.2007. The Division Bench has held
that the question is squarely covered by the full Bench decision of
that Court in the case of Dr. Dudh Nath Pandey vs. State of Jharkhand
and Ors. 2007 (4) JCR 1. In the said full Bench Judgment dated
28.8.2007, after detailed discussions on the various nuances of the
subject matter, the High Court has held:
" To sum up the answer for the two questions are as follows:
(i)
Under Rule 43(a) and 43(b) of Bihar Pension Rules, there is no power
for the Government to withhold Gratuity and Pension during the pendency
of the departmental proceeding or criminal proceeding. It does not give
any power to withhold Leave Encashment at any stage either prior to the
proceeding or after conclusion of the Proceeding.
(ii) The
circular, issued by the Finance Department, referring to the withholding
of the leave encashment would not apply to the present facts of the
case as it has no sanctity of law".
5. Mr. Amarendra Sharan, the
learned Senior Counsel appearing for the petitioner accepted the fact
that in so far as the Pension Rules are concerned, there is no provision
for withholding a part of pension or gratuity. He, however, submitted
that there are administrative instructions which permit withholding of a
part of pension and gratuity. His submission was that when the rules
are silent on a particular aspect, gap can be filled by the -
administrative instructions which was well settled legal position, laid
down way back in the year 1968 by the Constitution Bench Judgment of
this Court in Sant Ram Sharma vs. Union of India 1968 (1) SCR 111. He,
thus, argued that the High Court has committed an error in holding that
there was no power with the Government to withhold the part of pension
or gratuity, pending disciplinary/criminal proceedings.
6. The
aforesaid arguments of the learned Senior Counsel based on the judgment
in Sant Ram Sharma would not cut any ice in so far as present case is
concerned, because of the reason this case has no applicability in the
given case. Sant Ram judgment governs the field of administrative law
wherein the Constitution Bench laid down the principle that the rules
framed by the authority in exercise of powers contained in an enactment,
would also have statutory force. Though the administration can issue
administrative instructions for the smooth administrative function, such
administrative instructions cannot supplant the rules. However, these
administrative instructions can supplement the statutory rules by taking
care of those situations where the statutory rules are silent. This
ratio of that judgment is narrated in the following manner:
"It is
true that there is no specific provision in the Rules laying down the
principle of promotion of junior or senior grade - officers to selection
grade posts. But that does not mean that till statutory rules are
framed in this behalf the Government cannot issue administrative
instructions regarding the principle to be followed in promotions of the
officers concerned to selection grade posts. It is true that Government
cannot amend or supersede statutory rules by administrative
instructions, but if the rules are silent on any particular point
Government can fill up the gaps and supplement the rules and issue
instructions and inconsistent with the rules already framed".
There
cannot be any quarrel on this exposition of law which is well grounded
in a series of judgments pronounced post Sant Ram Sharma case as well.
However, the question which is posed in the present case is altogether
different.
7. It is an accepted position that gratuity and pension
are not the bounties. An employee earns these benefits by dint of his
long, continuous, faithful and un-blemished service. Conceptually it is
so lucidly described in D.S. Nakara and Ors. Vs. Union of India; (1983) 1
SCC 305 by Justice D.A. Desai, who spoke for the Bench, in his
inimitable style, in the following words:
"The approach of the
respondents raises a vital and none too easy of answer, question as to
why pension is paid. And why was it required to be liberalised? Is the
employer, which expression will include even the State, bound to pay
pension? Is there any obligation on the employer to provide for the
erstwhile employee even after the contract of employment has come to an
end and the employee has ceased to render service?
What is a
pension? What are the goals of pension? What public interest or purpose,
if any, it seeks to serve? If it does seek to serve some public
purpose, is it thwarted by such artificial division of retirement pre
and post a certain date? We need seek answer to these and incidental
questions so as to render just justice between parties to this petition.
The
antiquated notion of pension being a bounty a gratituous payment
depending upon the sweet will or grace of the employer not claimable as a
right and, therefore, no right to pension can be enforced through Court
has been swept under the carpet by the decision of the Constitution
Bench in Deoki Nandan Prasad v. State of Bihar and Ors.[1971] Su. S.C.R.
634 wherein this Court authoritatively ruled that pension is a right
and the payment of it does not depend upon the discretion of the
Government but is governed by the rules and a Government servant coming
within those rules is entitled to claim pension. It was further held
that the grant of pension does not depend upon any one’s discretion. It
is only for the purpose of quantifying the amount having regard to
service and other allied maters that it may be necessary for the
authority to pass an order to that effect but the right to receive
pension flows to the officer not because of any such order but by virtue
of the rules. This view was reaffirmed in State of Punjab and Anr. V.
Iqbal Singh (1976) IILLJ 377SC".
8. It is thus hard earned benefit
which accrues to an employee and is in the nature of "property". This
right to property cannot be taken away without the due process of law as
per the provisions of Article 300 A of the Constitution of India.
9.
Having explained the legal position, let us first discuss the rules
relating to release of Pension. The present case is admittedly governed
by -
Bihar Pension Rules, as applicable to the State of Jharkhand.
Rule 43(b) of the said Pension Rules confers power on the State
Government to withhold or withdraw a pension or part thereof under
certain circumstances. This Rule 43(b) reads as under:
"43(b) The
State Government further reserve to themselves the right of withholding
or withdrawing a pension or any part of it, whether permanently or for
specified period, and the right of ordering the recovery from a pension
of the whole or part of any pecuniary loss caused to Government if the
pensioner is found in departmental or judicial proceeding to have been
guilty to grave misconduct, or to have caused pecuniary loss to
Government misconduct, or to have caused pecuniary loss to Government by
misconduct or negligence, during his service including service rendered
on re-employment after retirement".
From the reading of the aforesaid Rule 43(b), following position emerges:-
(i)
The State Government has the power to withhold or withdraw pension or
any part of it when the pensioner is found to be guilty of grave
misconduct either in a departmental proceeding or judicial proceeding.
(ii)
This provision does not empower the State to invoke the said power
while the department proceeding or judicial proceeding are pending.
(iii)
The power of withholding leave encashment is not provided under this
rule to the State irrespective of the result of the above proceedings.
(iv) This power can be invoked only when the proceedings are concluded finding guilty and not before.
10. There is also a Proviso to Rule 43(b), which provides that:-
"A.
Such departmental proceedings, if not instituted while the Government
Servant was on duty either before retirement or during re-employment.
i. Shall not be instituted save with the sanction of the State Government.
ii Shall be in respect of an event which took place not more than four years before the institution of such proceedings.
iii
Shall be conducted by such authority and at such place or places as the
State Government may direct and in accordance with the procedure
applicable to proceedings on which an order of dismissal from service
may be made:-
B. Judicial proceedings, if not instituted while the
Government Servant was on duty either before retirement or during
re-employment shall have been instated in accordance with sub clause
(ii) of clause (a) and
C. The Bihar Public Service Commission, shall be consulted before final orders are passed.
It
is apparent that the proviso speaks about the institution of
proceedings. For initiating proceedings, Rule 43(b) puts some
conditions, i.e, Department proceeding as indicated in Rule 43(b), if
not instituted while the Government Servant was on duty, then it shall
not be instituted except:-
(a) With the sanction of the Government,
(b) It shall be in respect of an event which took place not more than four years before the institution of the proceedings.
(c)
Such proceedings shall be conducted by the enquiry officer in
accordance with the proceedings by which dismissal of the services can
be made.
Thus, in so far as the proviso is concerned that deals
with condition for initiation of proceedings and the period of
limitation within which such proceedings can be initiated.
11.
Reading of Rule 43(b) makes it abundantly clear that even after the
conclusion of the departmental inquiry, it is permissible for the
Government to withhold pension etc. ONLY when a finding is recorded
either in departmental inquiry or judicial proceedings that the employee
had committed grave misconduct in the discharge of his duty while in
his office. There is no provision in the rules for withholding of the
pension/ gratuity when such departmental proceedings or judicial
proceedings are still pending.
12. Right to receive pension was
recognized as right to property by the Constitution Bench Judgment of
this Court in Deokinandan Prasad vs. State of Bihar; (1971) 2 SCC 330,
as is apparent from the following discussion:
"29. The last
question to be considered, is, whether the right to receive pension by a
Government servant is property, so as to attract Articles 19(1)(f) and
31(1) of the Constitution. This question falls to be decided in order to
consider whether the writ petition is maintainable under Article 32. To
this aspect, we have already adverted to earlier and we now proceed to
consider the same.
30. According to the petitioner the right to
receive pension is property and the respondents by an executive order
dated June 12, 1968 have wrongfully withheld his pension. That order
affects his fundamental rights under Articles 19(1)(f) and 31(1) of the
Constitution. The respondents, as we have already indicated, do not
dispute the right of the petitioner to get pension, but for the order
passed on August 5, 1966. There is only a bald averment in the
counter-affidavit that no question of any fundamental right arises for
consideration. Mr. Jha, learned counsel for the respondents, was not
prepared to take up the position that the right to receive pension
cannot be considered to be property under any circumstances. According
to him, in this case, no order has been passed by the State granting
pension. We understood the learned counsel to urge that if the State had
passed an order granting pension and later on resiles from that order,
the latter order may be considered to affect the petitioner's right
regarding property so as to attract Articles 19(1) (f) and 31(1) of the
Constitution.
31. We are not inclined to accept the contention of
the learned counsel for the respondents. By a reference to the material
provisions in the Pension Rules, we have already indicated that the
grant of pension does not depend upon an order being passed by the
authorities to that effect. It may be that for the purposes of
quantifying the amount having regard to the period of service and other
allied matters, it may be necessary for the authorities to pass an order
to that effect, but the right to receive pension flows to an officer
not because of the said order but by virtue of the Rules. The Rules, we
have already pointed out, clearly recognise the right of persons like
the petitioner to receive pension under the circumstances mentioned
therein.
32. The question whether the pension granted to a public
servant is property attracting Article 31(1) came up for consideration
before the Punjab High Court in Bhagwant Singh v. Union of India A.I.R.
1962 Pun 503. It was held that such a right constitutes 'property' and
any interference will be a breach of Article 31(1) of the Constitution.
It was further held that the State cannot by an executive order curtail
or abolish altogether the right of the public servant to receive
pension. This decision was given by a learned Single Judge. This
decision was taken up in Letters Patent Appeal by the Union of India.
The Letters Patent Bench in its decision in Union of India v. Bhagwant
Singh I.L.R. 1965 Pun 1 approved the decision of the learned Single
Judge. The Letters Patent Bench held that the pension granted to a
public servant on his retirement is 'property' within the meaning of
Article 31(1) of the Constitution and he could be deprived of the same
only by an authority of law and that pension does not cease to be
property on the mere denial or cancellation of it. It was further held
that the character of pension as 'property' cannot possibly undergo such
mutation at the whim of a particular person or authority.
33. The
matter again came up before a Full Bench of the Punjab and Haryana High
Court in K.R. Erry v. The State of Punjab I.L.R. 1967 P & H 278.
The High Court had to consider the nature of the right of an officer to
get pension. The majority quoted with approval the principles laid down
in the two earlier decisions of the same High Court, referred to above,
and held that the pension is not to be treated as a bounty payable on
the sweet will and pleasure of the Government and that the right to
superannuation pension including its amount is a valuable right vesting
in a Government servant It was further held by the majority that even
though an opportunity had already been afforded to the officer on an
earlier occasion for showing cause against the imposition of penalty for
lapse or misconduct on his part and he has been found guilty,
nevertheless, when a cut is sought to be imposed in the quantum of
pension payable to an officer on the basis of misconduct already proved
against him, a further opportunity to show cause in that regard must be
given to the officer. This view regarding the giving of further
opportunity was expressed by the learned Judges on the basis of the
relevant Punjab Civil Service Rules. But the learned Chief Justice in
his dissenting judgment was not prepared to agree with the majority that
under such circumstances a further opportunity should be given to an
officer when a reduction in the amount of pension payable is made by the
State. It is not necessary for us in the case on hand, to consider the
question whether before taking action by way of reducing or denying the
pension on the basis of disciplinary action already taken, a further
notice to show cause should be given to an officer. That question does
not arise for consideration before us. Nor are we concerned with the
further question regarding the procedure, if any, to be adopted by the
authorities before reducing or withholding the pension for the first
time after the retirement of an officer. Hence we express no opinion
regarding the views expressed by the majority and the minority Judges in
the above Punjab High C.A. No.6770/2013 @ SLP (C) No. 1427 of 2009
Court decision, on this aspect. But we agree with the view of the
majority when it has approved its earlier decision that pension is not a
bounty payable on the sweet will and pleasure of the Government and
that, on the other hand, the right to pension is a valuable right
vesting in a government servant.
34. This Court in State of Madhya
Pradesh v. Ranojirao Shinde and Anr. MANU/SC/0030/1968 : [1968]3SCR489
had to consider the question whether a 'cash grant' is 'property' within
the meaning of that expression in Articles 19(1)(f) and 31(1) of the
Constitution. This Court held that it was property, observing 'it is
obvious that a right to sum of money is property'.
35. Having due
regard to the above decisions, we are of the opinion that the right of
the petitioner to receive pension is property under Article 31(1) and by
a mere executive order the State had no power to withhold the same.
Similarly, the said claim is also property under Article 19(1)(f) and it
is not saved by Sub-article (5) of Article 19. Therefore, it follows
that the order dated June 12, 1968 denying the petitioner right to
receive pension affects the fundamental right of the petitioner under
Articles 19(1) (f) and 31(1)of the Constitution, and as such the writ
petition under Article 32 is maintainable. It may be that under the
Pension Act (Act 23 of 1871) there is a bar against a civil court
entertaining any suit relating to the matters mentioned therein. That
does not stand in the way of a Writ of Mandamus being issued to the
State to properly consider the claim of the petitioner for payment of
pension according to law".
13. In State of West Bengal Vs. Haresh
C. Banerjee and Ors. (2006) 7 SCC 651, this Court recognized that even
when, after the repeal of Article 19(1)(f) and Article 31 (1) of the
Constitution vide Constitution (Forty- Fourth Amendment) Act, 1978
w.e.f. 20th June, 1979, the right to property was no longer remained a
fundamental right, it was still a Constitutional right, as provided in
Article 300A of the Constitution. Right to receive pension was treated
as right to property. Otherwise, challenge in that case was to the vires
of Rule 10(1) of the West Bengal Services (Death-cum-- Retirement
Benefit) Rules, 1971 which conferred the right upon the Governor to
withhold or withdraw a pension or any part thereof under certain
circumstances and the said challenge was repelled by this Court. Fact
remains that there is an imprimatur to the legal principle that the
right to receive pension is recognized as a right in "property".
14. Article 300 A of the Constitution of India reads as under:
"300A
Persons not to be deprived of property save by authority of law. - No
person shall be deprived of his property save by authority of law."
Once
we proceed on that premise, the answer to the question posed by us in
the beginning of this judgment becomes too obvious. A person cannot be
deprived of this pension without the authority of law, which is the
Constitutional mandate enshrined in Article 300 A of the Constitution.
It follows that attempt of the appellant to take away a part of pension
or gratuity or even leave encashment without any statutory provision and
under the umbrage of administrative instruction cannot be countenanced.
15.
It hardly needs to be emphasized that the executive instructions are
not having statutory character and, therefore, cannot be termed as "law"
within the meaning of aforesaid Article 300A. On the basis of such a
circular, which is not having force of law, the appellant cannot
withhold - even a part of pension or gratuity. As we noticed above, so
far as statutory rules are concerned, there is no provision for
withholding pension or gratuity in the given situation. Had there been
any such provision in these rules, the position would have been
different.
16. We, accordingly, find that there is no merit in the
instant appeals as the impugned order of the High Court is without
blemish. Accordingly, these appeals are dismissed with costs quantified
at Rs. 10,000/- each.
……………………….J.
[K.S. Radhakrishnan]
………………………….J.
[A.K. Sikri]
New Delhi
August 14, 2013
