Patna High Court
Arvind Kumar Singh vs The State Of Bihar & Ors on 2 May, 2018
Equivalent citations: AIRONLINE 2018 PAT 394
Author: Rajendra Menon
Bench: Chief Justice, Ravi Ranjan, Rajeev Ranjan Prasad
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.15328 of 2016
======================================================
Arvind Kumar Singh, Son of Late Rup Narayan Singh, Resident of village
and P.O. Madhopur Hazari, P.S. Sahebganj, District Muzaffarpur the retired
Superintending Engineer, Rural Works Department, Work Circle, Siwan
... ... Petitioner/s
Versus
1. The State of Bihar through the Chief Secretary, Government of Bihar, Patna
2. The Principal Secretary, Rural Works Department, Government of Bihar,
Patna
3. The Accountant General, Bihar, Patna
... ... Respondent/s
======================================================
with
Letters Patent Appeal No. 2143 of 2016
In
Civil Writ Jurisdiction Case No.7093 of 2014
======================================================
Shashi Bhushan Singh, aged about 70 years, Son of Late Narayan Prasad,
resident of Professor Colony, Dhaneshwar Ghat, Biharsharif, Police Station
Biharsharif, District Nalanda.
... ... Appellant/s
Versus
1. The State of Bihar through the Secretary, Road Construction Department,
Vishwesharaiya Bhawan, Bailey Road, Patna.
2. The Engineer-in-Chief, Road Construction Department, Vishwesharaiya
Bhawan, Bailey Road, Patna.
3. The Under Secretary, Road Construction Department, Vishwesharaiya
Bhawan, Bailey Road, Patna.
4. The Accountant General (Accounts and Entitlement), Bihar, Patna, Birchand
Patel Path, Police Station Kotwali, District Patna.
Patna High Court CWJC No.15328 of 2016 dt.02-05-2018
2/34
... ... Respondent/s
======================================================
with
Letters Patent Appeal No. 2156 of 2016
In
Civil Writ Jurisdiction Case No.5380 of 2014
======================================================
Ramanand Ram, aged about 63 years, Son of Late Tengar Ram, Resident of
Mohalla Srikrishna Nagar, West of Shiv Mandir, Police Station Aurangabad,
District - Aurangabad
... ... Appellant/s
Versus
1. The State of Bihar through the Secretary, Road Construction Department,
Vishwesharaiya Bhawan, Bailey Road, Patna.
2. The Special Secretary, Road Construction Department, Vishwesharaiya
Bhawan, Bailey Road, Patna.
3. The Deputy Secretary (Vigilance), Road Construction Department, Bihar,
Patna.
4. The Under Secretary (Accounts), Road Construction Department,
Vishwesharaiya Bhawan, Patna.
5. The Principal Secretary, Finance Department, Old Secretariat, Patna.
6. The Director, Provident Fund, Pant Bhawan, Patna.
7. The Treasury Officer, Vishwesharaiya Bhawan, Bailey Road, Patna.
8. The Treasury Officer, Aurangabad.
9. The Estate Officer, Building Construction Department, Vishwesharaiya
Bhawan, Patna.
10. The Executive Engineer, Rent Division, Building Construction Department,
Shastrinagar, Patna.
11. The Accountant General (Accounts and Entitlement), Birchand Patel Path,
Patna.
... ... Respondent/s
======================================================
Patna High Court CWJC No.15328 of 2016 dt.02-05-2018
3/34
Appearance :
(In Civil Writ Jurisdiction Case No. 15328 of 2016)
For the Petitioner/s : Mr. S.B.K. Manglam, Advocate
Mr. Ravi Ranjan, Advocate
For the Respondent/s : Mr. Lalit Kishore, Advocate General
Mr. Prashant Pratap, Advocate
Mr. Dev Kumar Pandey, Advocate
Mr. Lala S.N. Rais, A.C. to G.P. 2
Mr. Gyanshankar, A.C. to G.P. 2
Mr. Asit Jha, Advocate
For the A.G : Mr. Jitendra Kumar Roy, Advocate
Miss. Nikki Singh, Advocate
(In Letters Patent Appeal No. 2143 of 2016)
For the Appellant/s : Mr. Rupak Kumar, Advocate
For A.G., Bihar : Mr. Satyendra Kumar Jha, Advocate
For the State : Mr. Rajballav Prasad Yadav, AAG-11
(In Letters Patent Appeal No. 2156 of 2016)
For the Appellant/s : Mr. Rupak Kumar, Advocate
For A.G. Bihar : Mr. Satyendra Kumar Jha, Advocate
For the State : Mr. Raj Ballav Prasad Yadav-AAG-11
======================================================
CORAM: HONOURABLE THE CHIEF JUSTICE
and
HONOURABLE DR. JUSTICE RAVI RANJAN
and
HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD
CAV JUDGMENT
(Per: HONOURABLE THE CHIEF JUSTICE)
Date : 02-05-2018
All these matters; one writ petition and two appeals
under Clause 10 of the Letters Patent, have been placed before
us for consideration in view of references made by the Single
Patna High Court CWJC No.15328 of 2016 dt.02-05-2018
4/34
Bench and the Division Bench respectively.
2. The legal questions involved, pertains to the
right of the State Government in withholding full gratuity and
encashment of Earned Leave in cases of employees against
whom, at the time of superannuation departmental or criminal
proceedings were pending. The question further referred is with
regard to the divergent views taken by two Division Benches of
this Court in the case of Vijay Kumar Mishra Vs. The State of
Bihar & Ors.-2017 (1) PLJR 575 and Bajrang Deo Narain
Sinha Vs. State of Bihar- 1999 (3) PLJR 949.
3. Before adverting to consider the legal issues
involved, it would be appropriate to consider the facts of each
case.
4. In C.W.J.C. No. 15328 of 2016, the petitioner
therein Sri Arvind Kumar Singh was working as an Assistant
Engineer in the Public Works Department. He was appointed in
the year 1980, was promoted from time to time and on
22.08.2013, while he was working as Superintending Engineer in the Rural Works Department, Works Circle, Siwan, a raid was conducted in his premises and pursuant thereto Vigilance Police Station Case No. 50/2013 was registered against him for offences under Section 13(2) read with Section 13(1)(e) of the Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 5/34 Prevention of Corruption Act, 1988. It is reported that the case is still pending. That apart, finding him to be a public servant who was found to be in possession of assets and property disproportionate to his known source of income, he was put under suspension by the State Government on 18.02.2014 under Rule 9(1)(c) of the Bihar Government Servants (Classification, Control and Appeal) Rules, 2005 and subsequent thereto a charge-sheet dated 10.02.2014 was issued to him, while the departmental and the criminal proceedings were pending, he superannuated on 31.05.2015. When, the petitioner, submitted his claim for payment of retiral benefits, he was sanctioned 90% of provisional pension, Provident Fund dues, however, 10% pension, full gratuity and admissible leave encashment were withheld. Challenging withholding of his full gratuity and admissible leave encashment and claiming release of the balance 10 per cent of pension the writ petition in question was filed and placing reliance on Rule 43(b) and (c) of the Bihar Pension Rules, 1950 (hereinafter referred to as the "Pension Rules") and on a judgment of the Supreme Court in the case of State of Jharkhand & Ors. Vs. Jitendra Kumar Srivastava & Ors.- (2013) 12 SCC 210, the pensionary benefits were demanded. Reliance on another judgment, rendered by a Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 6/34 Division Bench of this Court in the case of Md. Adris Ansari Vs. State of Bihar & Ors.-1994 (1) PLJR 809, approved by the Supreme Court in the case of State of Bihar & Ors. Vs. Md. Adris Ansari- AIR 1995 Supreme Court 1853 was also placed to say that until and unless the employee concerned is held guilty of the misconduct levelled against him or punished in the judicial proceedings pending, in view of the provisions of Rule 43(b) pension, gratuity and leave encashment cannot be withheld. It was also argued that there is no provision in the pension rule for withholding of leave encashment, and therefore, in view of the judgment of a Division Bench in the case of Bajrang Deo Narain Sinha Vs. State of Bihar 1999 (3) PLJR 949, pensionary dues of the petitioner including gratuity, pension and leave encashment cannot be withheld. Here again, reliance was placed on the provisions of Rule 43(b) of the Pension Rules.
5. However, before the learned Writ Court on behalf of the State Government, a judgment of the Division Bench in the case of Vijay Kumar Mishra (supra) was brought to the notice of the Court and it was argued that in this case the Division Bench after placing reliance on certain circulars said to have been issued by the State Government on 31.07.1980 has Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 7/34 held that the entire gratuity and leave encashment can be withheld and, therefore, the petition is liable to be rejected. Reliance was also placed on certain other judgments of the Division Bench and the Single Bench in L.P.A. No. 720 of 2014 decided on 22.03.2017 (The State of Bihar and others Vs. Mozaffar Hassan) and a judgment delivered on 20 th of August, 2016 C.W.J.C. No. 448 of 2013 (Ram Prakash Yadav Vs. The State of Bihar & Ors.). It was the case of the State Government that in view of the law laid down in the case of Vijay Kumar Mishra (supra) distinguishing the law laid down in the case of Jitendra Kumar Srivastava (supra) and interpreting the circular bearing No. 3014 dated 31.07.1980, the petition was liable to be dismissed.
6. Faced with the divergent views brought to its notice and after finding that in the case of Vijay Kumar Mishra (supra) Rule 43(c) of the Pension Rules, which came into force on 19th of July, 2012, has not been considered and also referring to Rule 27 of the Pension Rules to say that in view of this position whether gratuity could be withheld, the learned Writ Court formulated the following two questions:-
"(i) Whether the law laid down by a Bench of this Court in Vijay Kumar Mishra (supra) holding that the leave encashment of a Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 8/34 Government employee besides gratuity can be withheld under the provisions of the Bihar Pension Rules has been correctly laid down in view of the fact that there is no provision in the said Bihar Pension Rules in this regard providing for withholdment of leave encashment also?
(ii) Whether the law laid down by a Bench of this Court in The State of Bihar & Ors. Vs. Mozaffar Hassan (supra) and by a learned Single Judge in Ram Prakash Yadav (Supra) holding that the entire amount of gratuity and leave encashment can be withheld under the provisions of the Bihar Pension Rules in view of the law laid down in Vijay Kumar Mishra (Supra) has been correctly laid down specially in view of the statutory provision as contained in Rule 43(c) of the Bihar Pension Rules?"
and directed for placing the matter before the Chief Justice for reference to a larger Bench and, therefore, the matter comes to us for consideration.
7. In L.P.A. No. 2143 of 2016 the appellant therein Sri Shashi Bhushan Singh and in L.P.A. No. 2156 of 2016 the appellant Sri Ramanand Ram have challenged a common judgment passed by the learned Writ Court in C.W.J.C. No. 7093 of 2014 and C.W.J.C. No. 5380 of 2014 whereby the writ Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 9/34 petitions have been dismissed and their claim for grant of leave encashment and gratuity rejected.
8. However, we find that in both these cases, namely, in the case of Shashi Bhushan Singh and Ramanand Ram they have been paid provisional pension and gratuity to the extent of 90 per cent but it is only leave encashment that has been denied to them. They claim that in view of the law laid down in the case of Jitendra Kumar Srivastava (supra) and Bajrang Deo Narain Sinha (supra), they are entitled to the entire pensionary benefit and until and unless they are not held guilty of misconduct or punished in the criminal case, in view of the provisions of Rule 43(b) of the Pension Rules, the post retiral benefit and leave encashment cannot be withheld.
9. When the matter was pending consideration before the Division Benches, it was brought to the notice of the Division Bench that certain questions with regard to the issue have been referred in C.W.J.C. No. 1538 of 2016 and in view of the recommendations made by the Division Benches both these L.P.As. i.e. L.P.A. No. 2143 of 2016 and 2156 of 2016 have been placed before us for consideration.
10. We have heard learned counsel appearing for the employees and the Advocate General representing the State Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 10/34 Government at length.
11. Learned counsel for the delinquent employees, invites our attention to the provisions of Rule 27 and 43(b) and
(c) of the Pension Rules and argue that pension includes gratuity and under Rule 43(b), pension and gratuity can be withheld or forfeited only if the employee is found guilty of grave misconduct or is convicted of serious crime. It is said that until and unless conviction on misconduct is not recorded in the criminal or the departmental proceedings, withholding of pension and gratuity is not permissible. It was further submitted that in view of the provisions of Rule 43(c) of the Pension Rules, which has been incorporated by amendment on 19th of July, 2012, only 10 per cent of the pension can be withheld and when pension includes gratuity, as contemplated under Rule 27, withholding of the entire gratuity is unsustainable, thereafter an alternate argument was made to say that the employees are entitled not only to payment of provisional pension, not below 90 per cent, but gratuity also to the extent of 90 per cent. That apart, it was argued that under the Pension Rules there is no provision for withholding of leave encashment and in view of the law laid down in the case of Bajrang Deo Narain Sinha (supra), withholding of leave encashment is impermissible. Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 11/34
12. Taking us through the judgment rendered in the case of Jitendra Kumar Srivastava, Bajrang Deo Narayan Sinha and Md. Idris Ansari (supra), it was argued that the judgment rendered in the case of Vijay Kumar Mishra does not lay down the correct proposition of law, it has not considered the effect of amendment to Rule 43(c) of the Pension Rules, it has wrongly interpreted the circular dated 31.07.1980. The circular dated 31.07.1980 permits payment of pension to the tune of 90 per cent and when pension includes gratuity, there is no question of permitting withholding gratuity in the garb of this circular. It is argued by the appellants that the principles of law laid down in the case of Vijay Kumar Mishra (supra) has not considered various aspects of the matter, particularly the provisions of the Pension Rules, as indicated hereinabove and, therefore, reference should be answered in favour of the delinquent employees.
13. Per contra, learned Advocate General took us through the circulars and resolutions of the State Government namely 4564 dated 6th of July, 1993, 9144 dated 22.08.1974, 11260 dated 31.10.1974 and 3014 dated 31.07.1980 and argued that in accordance to the circular of 1993, leave encashment can be withheld as it is granted under executive instructions only, Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 12/34 therefore, by an executive action, it can always be withheld. It was emphasized that, when, under the statute there is no provision for grant of leave encashment and when the entire concept of leave encashment is provided for by executive instructions, an executive action can also provide for withholding of leave encashment pending finalization of the departmental proceedings or the criminal case. Accordingly, it was argued that there is no illegality in the matter. In the case of Vijay Kumar Mishra (supra) and subsequently in the case of Mozaffar Hassan and Ram Prakash Yadav (supra), the issue has been correctly considered. Learned Advocate General also referred to a judgment of the Division Bench in L.P.A. No. 2189 of 2016 (Dr. Surendra Kumar Singh Vs. The State of Bihar & Ors.) and various other cases to argue that the employees are not entitled to full pension and gratuity as claimed by them and that withholding of gratuity and leave encashment is permissible in law. He invites our attention to the circular dated 31.10.1974 and 31.07.1980 to argue that the circular dated 31.07.1980 is a statutory circular as held by the Division Bench in the case of Vijay Kumar Mishra (supra) and subsequently in the case of Ramanand Ram and Shashi Bhushan Singh (supra) by the Writ Court and once in a statutory circular issued, a provision is Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 13/34 made by amending the Pension Rules permitting withholding of the entire gratuity, the law laid down in the case of Vijay Kumar Mishra (supra) will hold the field and no indulgence can be made into the matter.
14. Learned counsel argues that when the circular dated 31st of July, 1980 is a statutory circular having the effect of amending the pension rules and when in this circular there is a specific provision for withholding the entire gratuity in case an employee at the time of retirement is facing a departmental inquiry or criminal case, and as the Supreme Court in the case of Jitendra Kumar Srivastava (supra) has not taken note of the statutory nature of the circular and the statutory provisions applicable in the State of Bihar, the law laid down in the case of Vijay Kumar Mishra, Mozaffar Hassan and Ram Prakash Yadav (supra) by the Single Bench is a correct law and the same does not warrant any interference. Learned Advocate General took us through the various provisions of the circular and sought for answering of the reference in the manner, as indicated hereinabove.
15. Before adverting to take note of the legal questions involved, we may first consider the statutory provisions which are applicable in the matter. Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 14/34
16. The Bihar Pension Rules of 1950 was published by the Finance Department vide notification No. F.D. 100-F dated 20th of January, 1950 and was enacted by the State Government in view of the powers conferred on it under Clause
(b) of sub-section (2) of Section 241 of the Government of India Act, 1935. In the said rule, Rule 27, 43(a) and (b) read as under:-
"27. Pension includes a gratuity.
43 (a) Future good conduct is an implied condition of every grant of pension. The Provincial Government 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. The decision of the Provincial Government on any question of withholding or withdrawing the whole or any part of a pension under this rule, shall be final and conclusive.
(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 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 the pensioner is found in departmental or judicial proceeding to have been guilty of grave misconduct; or to have caused Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 15/34 pecuniary loss to Government by misconduct or negligence, during his service including service rendered on re-employment after retirement:
Provided 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; and
(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 instituted in accordance with sub-clause (ii) of clause (a); and
(c) the Bihar Public Service Commission, shall be consulted before final orders Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 16/34 are passed.
Explanation- For the purposes of the rule-
(a) departmental proceeding shall be deemed to have been instituted when the charges framed, against the pensioner are issued to him or, if the Government servant has been placed under suspension from an earlier date, on such date; and
(b) judicial proceedings shall be deemed to have been instituted:-
(i) in the case of criminal proceedings, on the date on which a complaint is made or a charge-sheet is submitted, to a criminal court; and
(ii) in the case of civil proceedings, on the date on which the complaint is presented, or as the case may be, an application is made to a civil Court."
17. Rule 43(b) confers right on the State Government to withhold pension which would include gratuity in terms of Rule 27, if an employee is found to be proceeded against departmentally and found guilty of grave misconduct or convicted in a judicial proceedings. However, Rule 43(c) which reads as under:-
"43(c) Where the departmental proceeding or judicial proceeding, in which the Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 17/34 prosecution has been sanctioned against such servant, initiated during the service period of the government servant, is not concluded till the retirement of the government servant, the amount of provisional pension shall be less than the maximum admissible amount of pension but shall in no case be less than 90% (ninety percent).
This will come into force with immediate effect."
was incorporated in the statute book by an amendment brought into force with effect from 19th of July, 2012.
18. Apart from these statutory provisions, in the matter of payment of pension and post retiral benefit, certain circulars have been issued by the State Government from time to time. On 22nd of August, 1974, a circular was issued, which provided for payment of only 75 per cent of the pension till conclusion of the departmental proceedings and this circular also contemplated that no gratuity or death-cum-retiral gratuity shall be payable. Subsequently, another circular was issued on 31.10.1974, wherein, with regard to payment of pension, the earlier circular of 22.08.1974 was clarified. For the sake of convenience, the contents of both these circulars dated 22 nd of August, 1974 and 31st of October 1974 are reproduced hereunder:-
Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 18/34 Circular dated 22nd August, 1974 "Subject- Payment of pension to Government servants who are under suspension or against whom departmental or judicial proceedings or enquiries have not been concluded on the date of compulsory retirement.
The question of sanctioning pension to Government servants who are under suspension or against whom departmental or judicial proceedings or enquiries have not been concluded on the date of compulsory retirement has been under active consideration of Government.
2. The State Government have been pleased to decide that (i) where any departmental or judicial proceeding is instituted under rule 43(b) of Bihar Pension Rules a Government servant or where a departmental proceeding is continued against an officer who have retired on attaining the age of compulsory retirement, or otherwise, he shall be paid during the period commencing from the date of his retirement to the date on which, upon conclusion of such proceedings, final orders are passed 75% provisional pension of the pension which would have been admissible on the basis of his qualifying service upto the date of retirement, or if he was under suspension on the date of retirement, upto the date immediately preceding the date on which he was placed under suspension, but no gratuity or death-cum-retirement gratuity shall Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 19/34 be paid to him until the conclusion of such proceeding and the issue of final orders thereon.
(ii) Payment of provisional pension may under the above provision shall be adjusted against the final retirement benefits sanctioned to such officer upon conclusion of the aforesaid proceedings but no recovery shall be made where the pension finally sanctioned is less than the provisional or the pension is reduced or withheld either permanently or for a specified period.
3. The grant of pension under the aforesaid provision shall not prejudice the operation of rule 139 of Bihar Pension Rules where final pension is sanctioned upon the conclusion of the proceedings.
4. These orders will be effective from the 1st November, 1970. All pending cases will be decided accordingly. (Vide F.D. Memo No. PC-11- 40-28/74/9144F., dated 22.8.1974.)."
Circular dated 31.10.1974 "Subject- Payment of pension to Government servants who are under suspension or against whom departmental or judicial proceedings or enquiries have not been concluded on the date of compulsory retirement.
In Finance Department's letter No. PC-
11-40.28/74/9144F, dated 22.8.1974; which provided that a Government servant who has Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 20/34 retired and against whom, any departmental or judicial proceedings are instituted or are continued shall be paid provisional pension to the extent of 75% of the admissible pension. The payment of provisional pension under the aforesaid orders is mandatory. But some administrative authorities appear to be under the impression that in cases where the departmental proceedings instituted against a Government servant were for major penalty and in which ultimately no pension might become payable on the conclusion of the proceedings after his retirement under rule 43 of Bihar Pension Rules, even the provision need not be sanctioned. This view is against the letter and spirit of the said rules. All Heads of departments etc. are therefore requested to bring to the notice of pension sanctioning authorities under them the correct position of the rules as well as the intention of the State Government so that the payment of 75% provisional pension is not denied to the retired Government servants. (Vide F.D. Memo No. PC- 11-40-98/74-11260 F, dated 31.10.1974)."
19. Finally, a circular was issued on 31st of July, 1980 which contemplates withholding of gratuity and leave encashment and payment of pension to the extent of 90 per cent. This circular notifies that it is being issued for amending the pension rules, the Bihar Service Code etc. This circular in Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 21/34 English reads as under:-
"1. The issue of expediting and simplifying the procedure for sanction and payment of pension to employees of the State Government was under consideration before the Government. After cautious consideration, the State Government has made the following amendments in the Bihar Pension Rules, Treasury Code, Service Code and related orders.
............ ................ .............
7. To withhold or withdraw pension-
(a) The decision contained in Clause-6 shall not affect Rule-43 of Bihar Pension Rules under which power is vested to withhold or withdraw pension.
(b) If any kind of departmental proceedings, criminal case, judicial enquiry etc. has not been initiated against any government servant till the date of his retirement then in that situation, the Pension Sanctioning Authority shall not be empowered to withhold pension under any circumstances. Rule-43 of Bihar Pension Rules is a Statutory Rule. Hence, the provisions contrary to it by different departments and circulars in respect of obtaining clearance certificate from Vigilance Department shall be deemed to be cancelled automatically.
(c) Where the final disposal of departmental or judicial proceeding initiated during the service period of any government servant is not possible Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 22/34 till the date of his/her retirement, then action to sanction provisional pension under provisions of Circular No. 9144/f, dated 22-8-1974 and 11260F, dated 31-10-1974 of the Finance Department be initiated so that that the government servant going to retire may not face any difficulty. Provisions contained in Clause 8(c) below shall not apply in matters of this category. In the cases of this category, the amount of provisional pension, as per rule, shall be less than the maximum amount of pension admissible but it shall not be less than 90 per cent in any circumstance.
(d) If pension papers under aforesaid Clause 2(d) have already been forwarded to the office of Authority for issuance of Pension Payment Order and meanwhile situation arises which may adversely affect the amount of pension, then, it be immediately communicated to the office of officer issuing pension/gratuity payment order (Accountant General).
........... ............... ...............
21. The corresponding provisions in the Pension Rules, Treasury Code and Bihar Service Code shall be deemed to be accordingly amended."
20. From the aforesaid narration, based on the statutory provisions and the circulars, it is clear that as far as withholding of pension is concerned, there is no dispute that 10 Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 23/34 per cent pension can be withheld and during the pendency of the departmental proceedings and the criminal case, 90 per cent provisional pension is to be granted. That is being followed and nobody has any dispute in this regard. The dispute, however, is with regard to non-payment of gratuity and leave encashment and withholding the entire gratuity and leave encashment. The question is as to whether this is permissible!
21. As far as gratuity is concerned, according to the State Government by virtue of the circulars of 22.08.1974 and after its clarification on 31.10.1974 once gratuity is directed to be withheld and when the circular dated 31 st of July, 1980, is statutory and has the effect of amending the Bihar Pension Rules, Treasury Code and Service Code, with a specific stipulation that the entire gratuity and leave encashment shall be withheld, there is no iota of doubt that the State Government is entitled to withhold the gratuity and leave encashment.
22. On a perusal of the circulars in question, we find that in the circular issued on 22 nd of August, 1974 a provision is made to pay 75 per cent pension to an employee who at the time of retirement is facing a departmental or judicial proceeding. This circular further contemplates that he shall not be paid any gratuity or death-cum-retirement gratuity during the Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 24/34 pendency of the proceeding. This circular is in the form of an order issued by the Finance Department and it nowhere indicates that it is a circular issued in exercise of the powers under Article 309 of the Constitution. Thereafter, a clarification to this circular was issued on 31.10.1974 and it was clarified that in no case pension should be withheld but 75 per cent pension should be granted. Finally, the third circular came into force on 31st of July, 1980. This circular speaks about the State Government making the amendments as contemplated therein to the Bihar Pension Rules, Treasury Code and Service Code and in this circular it is clearly indicated in Clause 7(c) that where final disposal of departmental or judicial proceeding initiated during the service period of a Government servant is not possible till the date of his retirement then action to sanction provisional pension under the circular of 22.08.1974 and 31.10.1974 may be initiated. Further, this circular goes to show that in the cases of this category of employees, amount of provisional pension as per rule shall be less than the maximum amount of pension admissible, but it shall not be less than 90 per cent in any circumstance. This circular speaks about sanctioning provisional pension under the provisions of the two earlier circulars of 22.08.1974 and 31.10.1974. While the Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 25/34 position was so existing, it was on 19th of July, 2012 that a new rule, namely, Rule 43(c), reproduced hereinabove, was introduced into the statute book and in this it is indicated that the amount of provisional pension shall be less than the maximum admissible amount of pension but shall in no case be less than 90 per cent.
23. Now, when we analyse the entire sequence of events, we find that the pension rule when it was initially enforced on 20th of January, 1950 provided that pension shall include gratuity, meaning thereby that wherever the word "pension" is used in the pension rule, it would also include gratuity i.e. without any iota of doubt, the intention of the rule maker in incorporating Rule 27 by saying that pension includes gratuity. Rule 43, as it originally stood, had only sub rule (a) and
(b) and these rules pertain to withholding or withdrawing of the pension in part or full after an employee has retired, subject to future good conduct and the effect of pecuniary loss caused to the State Government, pendency of departmental and judicial proceedings etc. Rule 43(b) was, therefore, only applicable in such cases where the employee is convicted or found guilty of misconduct. It is only after a finding of guilty is recorded in the departmental proceeding or the judicial proceeding that action Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 26/34 could be taken for withholding the pension in part or full. That being the position, the field with regard to action to be taken in cases where finality is not attained to the departmental proceedings or the criminal case, a decision was taken to release certain pension and withhold gratuity and leave encashment by virtue of the initial two circulars issued in the year 1974 i.e. 22 nd of August, 1974 and 31st of October, 1974 and finally in the form of the so-called statutory amendment brought into force on 31st of July, 1980. Even though in the circulars of 1974 there is specific stipulations for withholding gratuity and leave encashment, but in the notification dated 31st of July, 1980, the provision is that the amount of provisional pension, as per rule, shall not be less than the maximum amount of pension admissible but it shall not be less than 90 per cent in any circumstances. Now, while incorporating this provision, in this circular (i.e. 31st July, 1980), the word "gratuity" is absent and if provisional pension as per rule is directed to be paid and if the meaning of pension as contemplated under Rule 27 is to include gratuity, it is very clear that the circular does not contemplate withholding of gratuity. However, learned Advocate General referred to sub-clause (c) of Clause 7 of this circular to say that it is only in furtherance to the circulars of 22.08.1974 and Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 27/34 31.10.1974 and, therefore, the word "gratuity" having been used in the circulars of 1974, withholding of gratuity as per the circular of 1974 is permissible because it is incorporated in a statutory form while issuing the circular dated 31st of July, 1980.
24. Even if we, for a moment, accept this contention of the learned Advocate General then also we find that with regard to payment of provisional pension and gratuity the field was initially occupied by two circulars and one notification i.e. 22.08.1974, 31.10.1974 and 31st of July, 1980 respectively, the State Government in its own wisdom thought it appropriate to amend the pension rules again and incorporated Section 43 (c) on 19th of July, 2012 and when Section 43(c) was incorporated on 19th of July, 2012 in the matter of fixing the amount of provisional pension to be paid in cases where an employee is facing a departmental proceeding or a criminal case, the provision incorporated for the sake of repetition reads as under:-
"43(c) Where the departmental proceeding or judicial proceeding, in which the prosecution has been sanctioned against such servant, initiated during the service period of the government servant, is not concluded till the retirement of the government servant, the amount of provisional pension shall be less than the Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 28/34 maximum admissible amount of pension but shall in no case be less than 90% (ninety percent).
This will come into force with immediate effect."
25. When this amendment was incorporated on 19th of July, 2012, the State Government was aware of the earlier statutory circular dated 31st of July, 1980 and the administrative circulars of 1974, but while incorporating a provision in the rule itself by amending it, i.e. Rule 43(c), the rule maker consciously used the word "pension" only without carving out an exception with regard to withholding of gratuity. The omission of the word "gratuity" in the amended provisions of Rule 43(c), in our considered view, is a deliberate and conscious omission on the part of the rule maker. The rule maker knew that pension includes gratuity and when they speak about payment of provisional pension, the rule of interpretation mandates us to hold that it would mean payment of not only provisional pension but also gratuity until and unless the rule specifically provides for withholding of gratuity. That being so, once Rule 43(c) was incorporated into the statute and when Rule 43(c) does not empower the Government to withhold gratuity and when gratuity includes pension, in view of the provisions of Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 29/34 Rule 27, the contention of the State Government and the learned Advocate General cannot be accepted. We have to hold that once Rule 43(c) was incorporated in the statutory rule, the effect of the earlier statutory notification dated 30th of July, 1980 is wiped out, nullified or deemed to have been repealed. Incorporation of Rule 43(c) on 19th of July, 2012 will have the effect of annulling the earlier notification dated 30 th of July, 1980 or the circulars of 1974 and therefore, once a statutory provision- Rule 43(c) is incorporated in the rule itself, it has to be given its full and complete meaning, by adopting a literal meaning to each and every word used therein, and if this principle of statutory interpretation is followed, the contention of the State Government has to be rejected and we have no hesitation in holding that after coming into force of the amendment to the Pension Rules by incorporating Rule 43(c) on 19th of July, 2012, an employee who is facing departmental inquiry or judicial proceeding on the date of his superannuation would be entitled to provisional pension which would include gratuity to the tune of an amount not less than 90 per cent.
26. Having held so, with regard to pension and gratuity, we are now required to consider the next question pertaining to grant of leave encashment to a retired employee. Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 30/34
27. As far as leave encashment is concerned, we find that there is no statutory provision, rule or regulation providing for encashment of Earned Leave. During the course of hearing, we had asked specific questions to the counsel appearing in the matters and we were informed that there is no statutory rule governing grant of leave encashment. It was stated that it is based on executive instructions and the statutory provision is only for granting Earned Leave to a Government employee.
28. The Bihar Service Code, Chapter-VI deals with general conditions of leave and from Rule 149 onwards, provisions have been made for grant of various kinds of leave like Casual Leave, Special Leave, Medical Leave, Extraordinary Leave, Hospital Leave etc. and under this Chapter from Rule 227 onwards provisions have been made for grant of Earned Leave. Under Rule 227 (1) it is stipulated that the Earned Leave admissible to a Government servant in permanent employment shall be in accordance to Clause (a) and (b) stipulated therein and under sub-section 2 it is contemplated that a Government servant shall cease to earn such leave when the Earned Leave due to him has reached a particular level. The method and principle for calculating Earned Leave etc. are provided in the Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 31/34 Rule. Nowhere in this rule is there a provision for permitting leave encashment. It is for the first time by an executive instruction bearing No. 4564 dated 6th of July, 1993, that a provision has been made for encashment of unused Earned Leave after retirement and in this circular in Paragraph 2 the following stipulations have been made:-
"2.mi;qZDr lanHkZ esa v/kksgLrk{kjh dks iqu% ;g Li"V djus dk funsZ'k gqvk gS fd NqV~Vh Lohd`r djus ds fy, l{ke inkf/kdkjh Lofoosd ls lEiw.kZ uxn jkf'k vFkok mlds fuf'pr va'k ds Hkqxrku dks oSls ekeys esa jksd ldrs gSa] ftlesa lsok&fuo`Rr deZpkjh ds fo:) lsok&fuo`fRr dh frfFk rd fdlh Hkh rjg dh foHkkxh; dk;Zokgh] QkStnkjh eqdnek vFkok U;kf;d tkWap dk vfUre fu"iknu ugha gks ik;k gks vkSj ftlesa tkWap ds QykQy ds :i esa olwyh dh {kh.k laHkkouk Hkh fo++|eku gksaA tkWap ds vfUre fu"iknu gksus ij jksds x;s Hkqxrku dks foeqDr dj fn;k tk;sxkA ijUrq tkWap ds ifj.kke Lo:i ;fn dksbZ olwyh djus dk fu.kZ; gks] rks olwyh djus ds ckn gh 'ks"k jkf'k foeqDr dh tk;sxhA " (Emphasis supplied)
29. From the aforesaid, it is clear that as far as leave encashment is concerned, leave encashment is not provided for in the Pension Rule. Under the Bihar Service Code, a provision has been made for grant of Earned Leave and by an executive instruction issued on 6th of July, 1993, a provision is Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 32/34 made for encashment of Earned Leave and while making the said provision a condition is stipulated that an employee shall not be granted encshment of Earned Leave till finalization of the departmental inquiry or the judicial proceeding. When the terms and conditions with regard to encashment of leave is not governed by any statutory provision and when the same is granted by an executive or administrative decision of the State Government so long as the administrative decision to withhold encashment of Earned Leave subsists, then on the happening of such circumstances, as are contemplated, we see no reason to hold that leave encashment can be granted even in cases where the employee at the time of retirement is facing departmental or judicial proceeding. The law laid down in this regard in the cases referred to hereinabove do not consider this aspect of the matter, all the cases proceeded under the mistaken asumption that the leave encashment is provided for in the Pension Rules, and, therefore, we have no hesitation in holding that when an employee is facing a criminal case or a departmental proceeding, at the time of his retirement, the Government is well within its power in withholding leave encashment.
30. Accordingly, we answer the questions referred to us in C.W.J.C. No. 15328/2016 in the following manner:-
Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 33/34 (1). The law laid down by the Bench of this Court in the case of Vijay Kumar Mishra (supra) holding that Leave Encashment of a Government employee can be withheld, is a correct proposition of law, however, we clarify that withholding of the leave encashment is not by virtue of the provisions of the Bihar Pension Rules or the leave rules, but, encashment of leave, being governed by executive instructions, its withholding by executive instruction is permissible and is in accordance with law. To that effect, the findings recorded and the observations made in the case of Vijay Kumar Mishra (supra) may be treated as incorrect and not indicating the correct position.
(2). As far as the second question is concerned, we answer it by holding that the law laid down by the Bench of this Court in the case of State of Bihar and others Vs. Mozaffar Hassan (supra) and by the learned Single Judge in the case of Ram Prakash Yadav (supra) and the law laid down in the case of Vijay Kumar Mishra (supra) to hold that gratuity can also be withheld under the provisions of the Bihar Pension Rules is an incorrect proposition of law. It has not been correctly held.
Gratuity cannot be withheld in view of the provisions of Rule 43(c) of the Bihar Pension Rules and the discussion made by us hereinabove, to that extent the law laid down in the case of Patna High Court CWJC No.15328 of 2016 dt.02-05-2018 34/34 Vijay Kumar Mishra and Mozaffar Hassan (supra) by the coordinate Division Bench stand overruled.
31. Having answered the legal questions, as indicated hereinabove, now all the three cases i.e. C.W.J.C. No. 15328 of 2016, L.P.A. No. 2143 of 2016 and L.P.A. No. 2156 of 2016 be placed for consideration before the appropriate Benches for their disposal on merit in accordance with law.
(Rajendra Menon, CJ) Dr. Ravi Ranjan, J : I agree (Dr. Ravi Ranjan, J) Rajeev Ranjan Prasad, J : I agree (Rajeev Ranjan Prasad, J) P.K.P. AFR/NAFR A.F.R. CAV DATE 04.04.2018 Uploading Date 02.05.2018 Transmission Date