Central Administrative Tribunal - Hyderabad
M Shanmukha Rai vs Bharat Sanchar Nigam Ltd on 23 September, 2021
OA No.541/2015
CENTRAL ADMINISTRATIVE TRIBUNAL
HYDERABAD BENCH : AT HYDERABAD
OA/021/00541/2015 & MA 1027/2016
Date of CAV : 08.09.2021
Date of Pronouncement:23.09.2021
Hon'ble Mr. Ashish Kalia, Judl. Member
Hon'ble Mr.B.V.Sudhakar, Admn. Member
M. Shanmukha Roy, S/o. late Raja Ram Mohan Roy,
Aged about 65 years, Occ: Retired Sub Divisional Engineer,
Telephone Exchange, Jeedimetla, Hyderabad.
...Applicant
(By Advocate : Dr. A. Raghu Kumar)
Vs.
1. Union of India, rep. by its Secretary,
Department of Telecommunications,
Ministry of Communications and Information Technology,
20 Ashoka Road, New Delhi -1.
2. The Principal Controller of Communication Accounts,
Department of Telecommunication,
Triveni Complex, Abids, Hyderabad - 1.
3. The Bharat Sanchar Nigam Limited,
Rep. by its Chairman cum Managing Director,
BSNL Corporate Office, Barakumba road,
Statesman House, New Delhi - 1.
4. The Chief General Manager,
A.P. Telecom, Bharat Sanchar Nigam Limited,
Door Sanchar Bhavan, Nampally Station Road,
Abids, Hyderabad.
5. The Principal General Manager,
Hyderabad Telecom District, BSNL,
BSNL Bhavan, Adarshnagar, Hyderabad.
....Respondents
(By Advocate : Mrs.K. Rajitha, Sr. CGSC;
Mr. M.C. Jacob, SC for BSNL
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OA No.541/2015
ORDER
(As per Hon'ble Mr. B.V.Sudhakar, Admin. Member) Through Video Conferencing:
2. The OA is filed challenging Rule 61 of BSNL CDA rules 2006 allegedly usurping the powers of the President in withholding the pension and gratuity of an employee absorbed in BSNL, granted for the combined period of service rendered in BSNL & DOT as well as against the order of recovery of Rs.3,19,786 from retiral benefits.
3. Brief facts of the case are that the applicant joined the Dept of Telecommunications as Technician Trainee on 13.08.1972 and rose to the rank of Sub Divisional Engineer on 02.01.2002. On being absorbed in BSNL w.e.f 1.10.2000 and while working as Sub Divisional Engineer (for short SDE), he was trapped by the CBI on 6.11.2006. The CBI court on 10.6.2013, convicted the applicant to suffer RI for 5 years and pay a fine of Rs.30,000. On approaching the Hon'ble High Court, the sentence was suspended on an interim basis vide order dated 12.6.2013. Thereafter, R-4 issued notice under Rule 61 of BSNL (CDA) Rules 2006 ( for short "BSNL Rules") proposing a suitable cut in pension and on receipt of reply, imposed a penalty of 100% cut in pension on permanent basis and forfeiture of 100% gratuity with immediate effect, for the services rendered under BSNL vide order dated 3.3.2014. In addition, recovery of Rs.3,19,786/- from retiral benefits of the applicant was ordered vide memo dated 12.3.2015. Applicant represented on 25.3.2015 in regard to Pension/ Pensionary benefits and there being no fruitful result, the OA is filed.Page 2 of 15 OA No.541/2015
4. The contentions of the applicant are that Sub Rule 25 (C) of Rule 37-
A and Rule 9 of CCS (Pension) Rules, if properly interpreted would further his cause. BSNL Rules framed with the approval of the Board cannot change the statutory status of CCS (Pension) Rules. Power assumed by Chairman, BSNL under Rule 61 of BSNL Rules is invalid under law. Correct rule to be applied is Rule 43 of BSNL rules. Applicant retired on 30.6.2010 and was paid provisional pension from 1.7.2020 on the ground of pending departmental/ criminal proceedings as per Rule 69 of CCS (Pension) rules. Dismissal/ removal of a DOT employee absorbed in BSNL for any misconduct while working for BSNL shall not amount to forfeiture of his retiral benefits accrued for the service rendered under DOT and such Removal/Dismissal has to be reviewed by DOT before the final decision is taken by BSNL. Applicant cited the judgment of the Hon'ble Supreme Court in the State of Jharkhand & Ors v Jitender Kumar Srivastava & Anr (CA No. 6770/2013) wherein it was held that pension cannot be withheld without the proper authority of law. Applicant represented on 25.03.2015 stating that on the date of his retirement there were no disciplinary proceedings pending against the applicant in terms of Rule 9 of CCS (Pension) Rules but of no avail. R-4 imposed the penalty in question, which is illegal. Pension and Pensionary benefits are considered as property under Article 300-A of the Constitution. Articles 21 & 300-A of the Constitution have been violated.
5. Respondents state that the applicant joined DOT as Technician and on rising to the rank of SDE, he was absorbed in BSNL w.e.f. 1.10.2010. Page 3 of 15 OA No.541/2015 Hence, BSNL Rules will apply to him to the extent specified from the date of absorption. Applicant was involved in a corruption case and when the criminal proceedings were pending, he retired on 30.6.2010. Consequently, applicant was granted provisional pension under Rule 61(4)(3) of BSNL Rules. Applicant was convicted to undergo R.I for 5 years and pay a fine of Rs.30,000/- for offences punishable under Prevention of Corruption Act (for short "PC Act"). Consequently, disciplinary action was initiated as per provisions contained under Rule 61 of BSNL Rules and after obtaining the approval of the Administrative Ministry and the competent authority, penalty referred to, was imposed. Pension Payment order was issued by R-2 duly adjusting the payable amount including the overpayment of leave encashment. Applicant after having been absorbed in BSNL, Rule 9 of CCS (Pension) Rules would not apply to his case. Sub rules 4, 7 & 25(C) of Rule 37-A were cited by the respondents to defend their decision to impose the penalty and the recovery ordered. In the appeal filed before the Hon'ble High Court, only the sentence was suspended but not the conviction. Applicant admitted that Rule 43 of the BSNL Rules, which is akin to sub- rule 25(c) of Rule 37-A of CCS (Pension) Rules, provides for safeguards to the extent of protection of retirement benefits for the service rendered consequent to dismissal/removal and in the case of the applicant only the pension/gratuity to the extent of services rendered in BSNL have been withdrawn. Applicant was granted pension for the service rendered in DOT to the extent of Rs.8303. The Hon'ble Supreme Court judgment cited by the applicant does not apply to his case.
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6. Heard both the counsel and perused the pleadings on record.
7. I. The dispute is in regard to application of Rule 61 of BSNL Rules to cause a cut in the pension/gratuity of the applicant. From the facts narrated, it is not in dispute that the applicant was convicted by the CBI Court in a corruption case by imposing RI for 5 years and fine of Rs.30,000. The sentence was suspended on preferring an appeal to the Hon'ble High Court of Judicature of Andhra Pradesh in CRL.A.MP No. 790 of 2013 in CRL.A.No.458 of 2013 on 12.06.2013. Respondents affirm that there is no infirmity in invoking Rule 61 of BSNL Rules for imposing hundred percent cut in pension and forfeiture of 100% gratuity in respect of the services rendered in BSNL.
II. Rule 37-A of CCS (Pension) Rules deals with Conditions for payment of pension on absorption consequent upon conversion of a Government Department into a Public Sector Undertaking. The contention of the applicant is that as per Sub Rule 22 of Rule 37-A of CCS (Pension) Rules, the sub rules 13 to 21 of Rule 37-A of the said Rules would not apply in the case of conversion of Dept. of Telecom Services & Telecom Operations into BSNL, in which case the pensionary benefits including family pension shall be paid by the Govt. This rule has to be read harmoniously with sub rule 25(c) of Rule 37-A of CCS (Pension) Rules, which reads as under:
(c) the dismissal or removal from service of the Public Sector Undertaking of any employee after his absorption in such undertaking for any subsequent misconduct shall not amount to forfeiture of the retirement benefits for the service rendered under the Government and in the event of his dismissal or removal or retrenchment the decisions of the undertaking shall be subject to review by the Ministry administratively concerned with the undertaking.Page 5 of 15 OA No.541/2015
As per the above provision, applicant was sanctioned a monthly pension of Rs.8303 for the service rendered under DOT. From a perusal of the impugned order dt. 03.03.2014, the cut in pension/gratuity was effected with the approval of the Administrative Ministry dt. 13.02.2014 (at page 24 of OA) and as per the orders of the appointing authority dt. 24.02.2014 (page 23 of the OA) in accordance with BSNL rules to the extent of services rendered in BSNL, which we have gone through. The order of the DoT dt. 13.02.2014 is as under:
"I am directed to refer to BSNL's above quoted letter and to state that the Department of Telecommunications has ratified the imposition of the proposed penalty of '100% cut in pension with immediate effect and forfeiture of 100% gratuity accrued out of his service in BSNL on Shri M.S. Roy (HRMS No. 197303587) the then SDE (PR & Mktg) O/o. GMTD Warangal, Hyderabad Telecom District, AP Telecom Circle (Absorbed in BSNL). BSNL may accordingly take further necessary action in the matter under intimation to this Department."
III. In regard to sub rule 25 of Rule 37-A, as cited by the applicant, we agree that the payment of pension for the service rendered in DOT will be granted to existing pensioners of DOT and those who have been deemed to have retired from DOT for the services rendered under DOT. However, we disagree with the contention of the applicant that Rule 9 of CCS (Pension) rules provides for withholding of pension in full or part for grave misconduct of Govt. Employee by the President and therefore, BSNL Rules framed with the approval of the Board, cannot be invoked violating Rule 9 of CCS (Pension) Rules to impose the penalty under reference. In this regard, we need to observe that the character and colour of the employment of the applicant, on being absorbed in the public sector undertaking, would Page 6 of 15 OA No.541/2015 change to that of a public sector employee with all his benefits being transferred to the Public sector undertaking as provided under sub rule 25 of Rule 37-A, as under:
(25) Upon conversion of a Government Department into a Public Sector Undertaking,-
(a) the balance of provident fund standing at the credit of the absorbed employees on the date of their absorption in the Public Sector Undertaking shall, with the consent of such undertaking, be transferred to the new Provident Fund Account of the employees in such undertaking;
(b) earned leave and half pay leave at the credit of the employees on the date of absorption shall stand transferred to such undertaking ;
(c) the dismissal or removal from service of the Public Sector Undertaking of any employee after his absorption in such undertaking for any subsequent misconduct shall not amount to forfeiture of the retirement benefits for the service rendered under the Government and in the event of his dismissal or removal or retrenchment the decisions of the undertaking shall be subject to review by the Ministry administratively concerned with the undertaking.
A reading of the sub clauses of Rule 37-A, extracted hereunder, would help in arriving at a clear conclusion in regard to the dispute on hand. For instance, Sub-Rule 4 of Rule 37-A makes it clear that once a Govt. employee is absorbed in a Public Sector, then from the date of absorption in the public sector, he/she would cease to be a Govt. Servant. The applicant was absorbed in BSNL based on his consent. In fact, sub-rule 2 of Rule 37-A has also provided the choice to revert to DOT or get absorbed in BSNL. The applicant did not revert to DOT but took a conscious decision to be with BSNL. Sub-Rule 7 of Rule 37-A further makes it emphatic that once absorbed, Rules of BSNL will apply. Hence, the contention of the applicant that Rule 9 of CCS (Pension) Rules has to be followed in his case has no substance. Sub-Rule 8 of Rule 37-A does state that the Government servant/ his family shall be eligible for pensionary benefits on the basis of the combined service rendered in Govt. and in the Page 7 of 15 OA No.541/2015 public sector undertaking. However, in the case of the applicant, as he was involved in a criminal case, the pension for the service rendered under DOT was paid in accordance with sub-rules 25 (c) of the Rule 37-A of CCS (Pension) Rules and the pension/gratuity for the service rendered under BSNL was withheld by invoking Rule 61 of BSNL Rules. The action of the respondents was thus in accordance with the relevant rules.
"37A. Conditions for payment of pension on absorption consequent upon conversion of a Government Department into a Public Sector Undertaking.--
(1) On conversion of a department of the Central Government into a Public Sector Undertaking, all Government servants of that Department shall be transferred en-masse to that Public Sector Undertaking, on terms of foreign service without any deputation allowance till such time as they get absorbed in the said undertaking, and such transferred Government servants shall be absorbed in the Public Sector Undertaking with effect from such date as may be notified by the Government. (2) The Central Government shall allow the transferred Government servants an option to revert back to the Government or to seek permanent absorption in the Public Sector Undertaking.
(3) The option referred to in sub-rule (2) shall be exercised by every transferred Government servant in such manner and within such period as may be specified by the Government.
(4) The permanent absorption of the Government servants as employees of the Public Sector Undertaking shall take effect from the date on which their options are accepted by the Government and on and from the date of such acceptance, such employees shall cease to be Government servants and they shall be deemed to have retired from Government service. (5) Upon absorption of Government servants in the Public Sector Undertaking, the posts which they were holding in the Government before such absorption shall stand abolished.
(6) The employees who opt to revert to Government service shall be redeployed through the surplus cell of the Government. (7) The employees including quasi-permanent and temporary employees but excluding casual labourers, who opt for permanent absorption in the Public Sector Undertaking shall, on and from the date of absorption, be governed by the rules and regulations or bye-laws of the Public Sector Undertaking.
(8) A permanent Government servant who has been absorbed as an employee of a Public Sector Undertaking and his family shall be eligible for pensionary benefits (including commutation of pension, gratuity, family pension or extra-ordinary pension), on the basis of combined service rendered by the employee in the government and in the Public Sector Undertaking in accordance with the formula for calculation of such pensionary benefits as may be in force at the time of his retirement from Page 8 of 15 OA No.541/2015 the Public Sector Undertaking or his death or at his option, to receive benefits for the service rendered under the Central Government in accordance with the orders issued by the Central Government.
"Explanation:- The amount of pension or family pension in respect of the absorbed employee on retirement from the Public Sector Undertaking or on death shall be calculated in the same way as calculated in the case of a Central Government servant retiring or dying, on the same day".
The applicant has harped on the aspect that he has to be proceeded under Rule 9 of CCS (Pension) Rules, since it is statutory in nature. If that be so, Sub-Rules (4) & (7) of Rule 37-A, which are also statutory in nature, extracted supra, ordain that the DOT employee ceases to be a Government employee on his absorption in BSNL and thereafter, Rules of BSNL will apply to him.
IV. Once the applicant has consented to be absorbed as BSNL employee, he is bound by the rules of BSNL as are applicable to the employees of BSNL. Employee is defined under rule 3 (8) of BSNL rules as under:
(8) 'Employee' means -
(a) a person in the employment of the Company including employees whose service are temporarily placed at the disposal of the company or a subsidiary or any PSU but does not include casual employee, work charged or contingent staff or workmen as defined in Industrial Disputes Act, 1947 and those governed by Industrial Employment (Standing orders) Act, 1946, and,
(b) persons on deputation to the company from Central/ State Govt. or a subsidiary of the company or any other PSU.
The applicant fits into this definition perfectly since he is in employment of BSNL having expressed his consent to be absorbed in BSNL. Having consented to be an employee of BSNL, the applicant cannot turn around and contend that certain Rules of BSNL will not apply to his case. This would go against the Doctrine of Estoppels, which in simple terms precludes a person from denying or to negate anything to the contrary Page 9 of 15 OA No.541/2015 of that which has been constituted as truth, either by his own actions, by his deeds or by his representations or by the acts of judicial or legislative officers. The truth in the instant case is that the applicant has been absorbed in BSNL as per his own consent and Rule 37-A of the CCS (Pension) Rules makes it clear he would be governed by BSNL rules. Therefore, he cannot go back and state that he is not bound by certain rules of BSNL as per the Doctrine of Estoppels.
V. Furthermore, pension of the applicant to the extent of services rendered in DOT, has been protected and paid in consonance with Rule 43 of BSNL Rules for the service rendered under DOT. Rule 43 is extracted for reference hereunder.
Rule 43. Special provisions in respect of D.O.T staff on permanent absorption in BSNL - Conferring safeguards relating to security of service on dismissal/ removal.
The D.O.T. employees on absorption in BSNL shall be governed by these rules from the date of their absorption in the company/date of issue of these rules. However, dismissal/removal from the service of BSNL after absorption, for any subsequent misconduct shall not amount to forfeiture of his retirement benefits for the service rendered in the Central Govt. Also in the event of dismissal/removal of such an employee from BSNL (i.e. D.O.T. staff permanently absorbed in BSNL), the employee concerned will be allowed protection to the extent that D.O.T. will review such order before final decision is taken by BSNL.
Applicant was involved in a corruption case and when the criminal proceedings were pending, he retired from service on 30.6.2010. Consequently, applicant was proceeded against, under Rule 61 (3) & (4) of BSNL Rules. The same are extracted hereunder:
(3) During the pendency of the disciplinary proceedings the disciplinary authority may withhold payment of gratuity for ordering the recovery from gratuity of the whole or part of any pecuniary loss caused to the company, if the employee is found in the disciplinary proceedings or judicial proceedings to have been guilty of offences/misconduct as mentioned in sub-section (6) of Section 4 of Page 10 of 15 OA No.541/2015 the Payment of Gratuity Act, 1972 or to have caused pecuniary loss to the company by misconduct or negligence, during his service including service rendered on deputation or on re-employment after retirement. However, the provisions of Section 7(3) and 7(3A) of the payment of Gratuity Act, 1972 should be kept in view in the event of delayed payment in case the employee is fully exonerated. (4)(1) Chairman/Managing Director is the competent authority to issue sanction to institute the departmental proceedings against the absorbed employees after retirement for withholding a pension for combined service of BSNL and DOT period (herein referred as pension) or gratuity or both either full or in part or withdrawing a pension in full or in part, whether permanently or for a specified period and of ordering recovery from a pension or gratuity of the whole or part of any pecuniary loss caused to the Company, if, any disciplinary or judicial proceedings, the pensioner is found guilty of grave misconduct or negligence during the period of service, including service rendered upon reemployment after retirement:
Provided that the Administrative Ministry shall be consulted before any final orders are passed:
The background in invoking Rule 61 of BSNL Rules is that the applicant was convicted to undergo R.I for 5 years and pay a penalty of Rs.30,000 for offences punishable under P.C Act. Consequently, R-3 gave approval to initiate disciplinary proceedings under Rule 61 of BSNL Rules vide letter dated 3.9.2013 and complying with the same, notice (Annexure R-II) was issued to the applicant on 16.9.2013 by R-4. After obtaining approval of the Ministry vide letter dated 13.2.2014 and that of the competent authority as well, vide order dated 24.2.2014, R-4 passed the order dated 3.3.2014 imposing the 100% cut in pension with immediate effect on permanent basis accrued out of BSNL services along with forfeiture of 100% gratuity earned for his service in BSNL.
Therefore, we are of the view that the contention of the applicant claiming that Rule 61 of BSNL Rules does not apply to DOT employee absorbed in BSNL in view of Rule 37-A & Rule 9 of CCS (Pension) Rules does not hold good in view of the Doctrine of Estoppels and because of the Page 11 of 15 OA No.541/2015 specific provisions contained in Rule 37-A of the CCS (Pension) Rules as well as the relevant BSNL Rules, brought out in paras supra. Hon'ble Supreme Court in Annamalai University Vs. Secretary to Government, Information and Tourism Department and others reported in (2009) 4 SCC 590, as under, has held that if an enactment which covers an issue broadly cannot be held to be invalid because it incidentally encroaches matters assigned to another legislature. In the instant case, BSNL Rules cover the case of the applicant more or less fully including the relevant aspects contained in Rule 37-A of CCS (Pension) Rules. Hence, applicant trying to claim that Rule 9 of CCS (Pension) Rules, which applies to a Govt. Servant in toto, does apply to the case of the applicant is contrary to law declared by the Hon'ble Apex court.
"46. In Prem Chand Jain Anr. vs. R.K. Chhabra [(1984) 2 SCR 883], this court held:
xxx In a series of decisions this Court has opined that if an enactment substantially falls within the powers expressly conferred by the Constitution upon the legislature enacting it, it cannot be held to be invalid merely because it incidentally encroaches on matters assigned to another legislature."
VI. Applicant claimed that there were no disciplinary proceedings pending at the time of retirement. However, criminal case was pending when the applicant retired on 30.6.2010 and was paid provisional pension pending criminal proceedings. It is the contention of the applicant that provisional pension was paid under rule 69 of CCS (Pension) Rules and the respondents claim that it was under sub-rule 4(3) of Rule 61 of BSNL rules.
Neither of the parties submitted the relevant documents. Nevertheless, applicant was paid provisional pension to the extent he is eligible till the penalty was imposed, which is of importance for our consideration, and Page 12 of 15 OA No.541/2015 there was no prejudice caused to the applicant in the process under the relevant rules.
The Hon'ble Supreme Court judgment cited by the applicant would not be of any assistance to him since, in the instant case, there is a specific provision by way of Rule 61 in the BSNL Rules to impose the cut in pension/gratuity, whereas in the case cited, there was no such provision.
Therefore, the decision of the respondents to impose the penalty of cut in pension/gratuity is in accordance with rules and law as was brought out in paras supra.
VII. However, when it comes to the aspect of recovery of Rs.3,19,786, the same is not in accordance with law laid down in State of Punjab & others vs. Rafiq Masih (White Washer) (2015) 4 SCC 334 and therefore, no recovery can be made from a retired employee, under the following provisos.
"18. It is not possible to postulate all situations of hardship which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred hereinabove, we may, as a ready reference summarise the following few situations, wherein recoveries by the employees would be impermissible in law:
i) Recovery from the employees belonging to Class-III & Class-IV service (or Group-C or Group-D service)
ii) Recovery from the retired employees, or the employees who are due to retire within one year of the order of recovery
iii) Recovery from the employees, when the excess payment has been made for a period in excess of five years before the order of recovery is issued
iv) Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been paid accordingly, even though he should have rightfully been required to work against an inferior post Page 13 of 15 OA No.541/2015
v) In any other case, where the Court arrives at the conclusion, that recovery if made from the employee, would be iniquitous or harsh or arbitrary, to such an extent as would far outweigh the equitable balance of the employer's right to recover."
The respondents have not averred that the applicant has misrepresented to obtain the benefit of excess payment of Leave encashment. Hence, any recovery ordered from the retiral benefits to the extent cited for excess payment made towards leave encashment, is in contravention of the legal principle cited supra of Hon'ble Apex Court and therefore not lawful. Hence the respondents need to refund the amount recovered from the applicant.
VIII. During the pendency of the OA, Applicant filed MA 1027/2016 seeking a direction to the respondents to release his pension for the service rendered by him in the DOT in terms of Rule 37-A of CCS (Pension) Rules, pending finalization of the OA. In the MA, the applicant submits that the respondents took a stand that since he has approached this Tribunal, his case for pension and pensionary benefits for the said service cannot be considered during the pendency of the OA. In response, applicant contends that he filed the OA being aggrieved by 100% cut in pension and gratuity accrued out of his BSNL service, which has nothing to do with payment of pensionary benefits for his government service. IX. Therefore, in view of aforesaid circumstances, we hold that the penalty imposed to the extent of withholding pension and gratuity, as specified in Order of the 4th respondent dt. 03.03.2014 cannot be interfered Page 14 of 15 OA No.541/2015 with. However, recovery effected to the extent of Rs.3,19,786, being violative of law, respondents shall refund the same to the applicant and they are also directed to process his case for payment of pensionary benefits vis- à-vis his DOT service expeditiously, if not already done. Time calendared to implement the judgment is 3 months from the date of receipt of this order.
X. With the above directions, the OA and MA are disposed of with no order as to costs.
(B.V.SUDHAKAR) (ASHISH KALIA)
ADMINISTRATIVE MEMBER JUDICIAL MEMBER
Evr
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