Punjab-Haryana High Court
Union Territory vs Central Administrative Tribunal on 31 January, 2013
Bench: A.K. Sikri, Rakesh Kumar Jain
CWP No. 562 of 2012 (O&M) -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
CWP No. 562 of 2012 (O&M)
Date of Decision : 31.01.2013
Union Territory, Chandigarh and another
...Petitioners
Versus
Central Administrative Tribunal, Chandigarh Bench
and others
...Respondents
CORAM: HON'BLE MR. JUSTICE A.K. SIKRI, CHIEF JUSTICE
HON'BLE MR. JUSTICE RAKESH KUMAR JAIN
Present: Mr. Sanjay Kaushal, Senior Standing Counsel,
for the Union Territory, Chandigarh.
Mr. N.P. Mittal, Advocate,
for respondents No. 2 to 6.
****
A.K. SIKRI, C.J. (ORAL)
The respondents No. 2 to 6 were in the service of Union Territory, Chandigarh and were posted in the Engineering Department under the Chief Engineer. They retired from service, on attaining the age of superannuation, on different dates between 30.06.2001 to 31.12.2008. However, the gratuity amount has not been paid to these respondents on their retirement. The reason given by the petitioner/Union Territory, Chandigarh is pendency of criminal proceedings arising out of FIR No. 01 dated 03.02.1998 registered at Police Station Vigilance, U.T., Chandigarh under Section 13(1)(a)(b)(c)(d) and Sub Section 2 of Section 13 of the Prevention of Corruption Act, 1988 (hereinafter referred to as the CWP No. 562 of 2012 (O&M) -2- Act) read with Sections 406, 409, 420 and 120-B of the Indian Penal Code. The FIR was registered against one Mr. K.K. Jairath and others in which the respondents No. 2 to 6 have also been implicated. As mentioned above, FIR was lodged in the year 1998. After investigation, challan was filed. Charges have been framed against the accused persons including the respondents No. 2 to 6 and the trial is going on in those proceedings.
2. The respondents No. 2 to 6 made representation to the petitioners to release their death-cum-retirement gratuity. As it was not done, they filed O.A. No. 517-CH of 2011. This O.A. has been allowed by the learned Tribunal vide judgement dated 30.09.2011 and impugning that judgement present writ petition is preferred.
3. A perusal of the order of the Tribunal would demonstrate that the Tribunal has come to the conclusion that the death-cum- retirement gratuity of the respondents herein could not be withheld when no departmental proceedings were pending against these persons on the date of superannuation. For coming to this conclusion, the Tribunal has relied upon a Division Bench judgement of this Court in Manohar Singh Vs Punjab State Electricity Board and others, 2006(2) RSJ 316. It is also mentioned that the aforesaid judgement is relied upon by another Single Bench of the said Tribunal in O.A. No. 146-CH of 2010, titled as K.B. Sharma Vs Union of India and others, decided on 15.04.2011. Before we comment on the rationale given by the Tribunal in allowing the O.A. of the respondents No. 2 to 6, it would be apposite to take note of the CWP No. 562 of 2012 (O&M) -3- provisions relating to payment of gratuity and withholding thereof. These are contained in Chapter II titled "General Provisions Relating to Grant of Pension", Punjab Civil Services Rules, Volume II, which are made applicable to the employees of the Union Territory, Chandigarh. Rule 2.1(b) and (c) as well as Rule 2.2(a) thereof are relevant for our purposes and are hereby reproduced below:-
"2.1 (b) The Government further reserve to themselves the right of withholding or withdrawing a pension or any part of it, whether permanently or for a 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 in a departmental judicial proceedings, the pensioner is found guilty of grave misconduct or negligence, during his service including service rendered or re-employment after retirement.
2.1 (c) --------but no gratuity or death-cum- retirement gratuity shall be paid to him until the conclusion of such proceedings and of final orders thereon. The gratuity, if allowed to be drawn by the competent authority on the conclusion of the proceedings will be deemed to have fallen due on the date of issue of final orders by the competent authority.
2.2(a) Recoveries from pensions:-
Future good conduct is an implied condition of every grant of pension. The government, however, reserve to themselves the right of withholding or withdrawing a pension or any part of it if the pensioner is convicted of serious crime or be guilty of grave misconduct."
4. Rule 2.1(b) clearly permits the government to withhold the pension or part of it, if in a departmental judicial proceedings, the CWP No. 562 of 2012 (O&M) -4- pensioner is found guilty of grave misconduct or negligence. Rule 2.1(c) , likewise, stipulates that no gratuity or death-cum-retirement gratuity would be payable to such an employee until the conclusion of departmental or criminal proceedings and final orders thereon. As per rule 2.2(a), the government has reserved in itself the right of withholding or withdrawing a pension or any part thereof, if the petitioner is convicted for a serious crime or the guilty of grave misconduct.
5. A conjoint reading of the aforesaid provision would clearly show that if there are departmental proceedings initiated and are pending at the time of retirement of such a person and result in proving the misconduct, which is treated as grave misconduct or negligence, his pension or part of pension can be forfeited. Likewise, the amount can also be recovered from the gratuity payable. Same is the position if criminal proceedings result in conviction because if the charges are established in the criminal proceedings of serious crime, the government is in a position to recover the pecuniary loss from the gratuity payable. That, in fact, is the intention behind even Section 4 of the Payment of Gratuity Act, 1972.
6. As noted above, in the present case, the charges which are levelled against the respondents No. 2 to 6 in the said FIR are of serious nature. Not only they are charged for corruption under the Act, but they have been accused for criminal breach of trust for which they are charged under Sections 406, 409, 420 and 120-B of the Indian Penal Code.
CWP No. 562 of 2012 (O&M) -5-
7. In a Full Bench judgement of this Court in Dr. Ishar Singh Vs State of Punjab and another, 1994(2) RSJ 543, it was categorically held that though provisional pension is to be granted, gratuity payable can be withheld during the pendency of such proceedings. The law laid down in that case was revisited in a recent Full Bench judgement of this Court in Punjab State Civil Supplies Corporation Ltd. and others Vs Pyare Lal (LPA No. 113 of 2012) decided on 09.11.2012. After discussing various other decisions of the Supreme Court and High Courts, the principles, which have been culled out therefrom, have been summarized in para 10 of the judgement, which read as under:-
"10. In Bengali Babu Misra vs. State of U.P. and Ors. reported as 2003 3 AWC 1760 and MANU/UP/1042/2002, decided on 5.12.2002, Division Bench of Allahabad High Court held that post retiral dues cannot be withheld in the absence of any provisions in service rules or Government orders or any other law authorising so. It was specifically held that post retiral dues, may be of gratuity, pension or other dues of the retiree, can be withheld only in accordance with any rule. In that case, since there was no such rule, the Court permitted release of retiral benefits, be it pension or other dues. Same view is taken by the High Court of Jharkhand in Dr. Dudh Nath Pandey Vs. The State of Jharkhand and others, 2009(2) SLJ 105 (Jharkhand). The specific question formulated in the said case was as under:-
"Whether in absence of any rule/guideline, the State Government has jurisdiction to withhold leave encashment or part of it, permanently or temporarily, or can recover the leave encashment, on the ground of CWP No. 562 of 2012 (O&M) -6- pendency of a departmental or criminal proceeding or on the ground that the retired employee has been convicted in a judicial proceeding or found guilty in a departmental proceeding?"
After scanning through various case laws on the subject, the Division Bench culled out the following principles:-
"17. The various guidelines which have been given by the decisions, referred to above, are as follows:
(i) The conditions precedent for imposing penalty of withholding pension is that there should be a finding in departmental enquiry or judicial proceeding that the pensioner committed grave misconduct in the discharge of his duty while in office.
(ii) Before the power under Rule 43(b) can be exercised in connection with alleged misconduct of the retired government servant, it must be shown that in departmental proceeding or judicial proceeding, the concerned Government servant has been found guilty of grave misconduct.
(iii) Unless the pensioner is found guilty of misconduct in departmental or judicial proceeding any part of his pension cannot be withheld.
(iv) The employee's right to pension is a statutory right. The measure of deprivation of his pension must be commensurate with the gravity of misconduct as it offends the right to assistance as framed under Article 41 of the Constitution.
(v) The pensionary dues payable to the employees including Gratuity which is also pension within the meaning of Bihar Pension Rules cannot be CWP No. 562 of 2012 (O&M) -7- withheld. Similarly, Leave Encashment cannot also be withheld since that is paid in lieu of unutilized leave as it partakes the character of salary.
(vi) The power under Rule 43(b) cannot be exercised before the pensioner is found in departmental or judicial proceeding guilty of grave misconduct.
(vii) The bare reading of the Rule 43(a) of the Bihar pension Rules would make it evident that the power to withhold or withdraw pension is permissible only when the pensioner is found to be guilty of grave misconduct and not that during the pendency of such proceedings."
The Court in that case was concerned with the leave encashment. Finding that there was no rule permitting the Government to withhold the benefit of leave encashment, the Court held that it could not be withheld. Reason given was that leave encashment partakes the character of salary, which is a property and, thus, withholding thereof in the absence of statute would mean depriving a person of his property without statute or law which would be violative of Article 300A of the Constitution of India. This is so stated in the following terms:-
"25. Before we go into the legal sanctity of the circular, it must be remembered that the Leave Encashment is paid on account of unutilized leave and therefore, it partakes the character of salary. Pension is no longer considered as a bounty. The salary is a property given to the hands of the State which cannot be withheld except under the powers derived by a statute or law as contemplated under Article 300A of the Constitution of India as laid down by the Supreme Court in MANU/SC/0046/1988:CWP No. 562 of 2012 (O&M) -8-
AIR1988SC1407 [State of U.P. v. Haji Ismail Noor] and MANU/SC/0325/2003: [2003] 3SCR779 [K.S.R.T.C. v. K.O. Varghese].
....... ........ ........ .......
28. The above executive instruction is not a law under Rule 300A of the Constitution of India. In the absence of any statutory rule, how can it be claimed that the Leave Encashment can be withheld by the Government on the strength of the executive instructions?"
8. It is clear from the above that if rule permits withholding of the gratuity during the pendency of departmental proceedings or the criminal proceedings, the employer has a right to withhold the same. The Tribunal in the impugned judgement has taken note of the provisions, which are extracted above, including Rule 2.1(c) which authorizes the petitioner to withhold the amount of gratuity during the pendency of departmental/criminal proceedings. Notwithstanding the said provision and without commenting on the impact thereof, O.A. of the respondents No. 2 to 6 is allowed by following the Division Bench judgement of this Court in Manohar Singh (supra). A close scrutiny of that judgement would clearly reveal that the judgement has no application to the facts of the present case. In that case, departmental inquiry had been held against the petitioner while he was in service and even the orders of punishment were passed when the petitioner was in service. Only a minor penalty was imposed and no finding was recorded to the effect that the petitioner in that case was guilty of grave misconduct. However, on the same CWP No. 562 of 2012 (O&M) -9- allegations, FIR was registered and the criminal proceedings were continued. Not only the charge was on the same allegations on which the departmental inquiry had already been held, the said charge was under Section 408 of the Indian Penal Code. It was on these facts that the Division Bench of this Court held that the gratuity should not be withheld. We are, therefore, of the opinion that the order of the learned Tribunal suffers from grave legal error and is unsustainable.
9. We accordingly set aside the impugned order of the Tribunal. As a result, O.A. filed by the respondents No. 2 to 6 before the Tribunal is hereby dismissed.
(A.K. SIKRI) CHIEF JUSTICE (RAKESH KUMAR JAIN) JUDGE 31.01.2013 Amodh