Service Law:
Retiral benefits – 10% of pension and full amount of gratuity – Withholding of – On account of pending criminal proceedings – On the basis of Circulars dated 22.8.1974 and 31.10.1974 r/w. Government Resolution dated 31.7.1980 – Challenged in writ petition – Single Judge of High Court dismissed the petition – Order affirmed in LPA – Appeal to Supreme Court – Held: Rule 43(b) of Bihar Pension Rules, 1950 which provides for withholding of pension does not cover a situation where judicial or departmental proceedings are pending – The Circulars and the Government Resolution being administrative/executive orders (not issued in exercise of the power u/Art. 309 of Constitution) have no force of law – Right to receive pension and gratuity are right to property protected under Art. 300A of the Constitution – It cannot be taken away by an executive fiat or administrative instruction – In absence of statutory Rules, State could not have withheld the pension and gratuity on the basis of executive instructions – Therefore, the State was unjustified in withholding 10% pension – However, after amendment of r. 43 on 19.7.2012 by insertion of clause(c), State is empowered to withhold 10% of pension amount – State is directed to release the 10% of pension amount from 31.3.2008 (date of superannuation) till 19.7.2012 – As per r. 27 of Pension Rules, ‘pension’ includes ‘gratuity’ – Therefore, entire gratuity amount also could not have been withheld – State is directed to release 90% of the gratuity amount – Bihar Pension Rules, 1950 – rr. 43 and 27.
Allowing the appeals, the Court
HELD: 1. A reading of Rule 43(b) of Bihar Pension Rules, 1950 would indicate that the State Government was empowered to withhold or withdraw the whole or part of the amount of pension, permanently or for a specified period, if the pensioner was “found to be guilty of grave misconduct” in any departmental or judicial proceeding, or to have “caused pecuniary loss to Government by misconduct or negligence”, during the tenure of his service. Rule 43(b) did not cover a situation where judicial or departmental proceedings were pending. [Paras 11.2 and 12.1][913 G-H; 914A]
2. The Circulars dated 22.08.1974 and 31.10.1974, and Government Resolution No. 3104 dated 31.07.1980, were merely administrative instructions/executive orders. They were not issued in exercise of the power under Article 309 of the Constitution and cannot be said to have the force of law. The absence of statutory rules permitting withholding of pension or gratuity, the State could not do so by way of executive instructions. [Para 13.1][917 A-B; 918-H; 919-A]
State of Jharkhand and Ors. v. Jitendra Kumar Srivastava and Ors. (2013) 12 SCC 210 : [2013] 8 SCR
177 – relied on.
3. The position has however changed with the amendment to the Bihar Pension Rules on 19.07.2012 by the Governor of Bihar in exercise of the powers under Article 309 of the Constitution, whereby Clause (c) has been inserted in Rule 43. Rule 43 (c) provides that where a departmental proceeding or judicial proceeding is initiated during the service period of a Government servant, and prosecution had been sanctioned but not concluded till superannuation, the provisional pension payable shall be less than the maximum admissible amount, but shall in no case be less than 90%. [Paras 13.2 and 13.3][919-B; 919D-E]
4. It is well settled that the right to pension cannot be taken away by a mere executive fiat or administrative instruction. Pension and gratuity are not mere bounties, or given out of generosity by the employer. An employee earns these benefits by virtue of his long, continuous, faithful and un-blemished service. The right to receive pension of a public servant has been held to be covered under the “right to property” under Article 31(1) of the Constitution. The right to receive pension has been held to be a right to property protected under Article 300A of the Constitution even after the repeal of Article 31(1) by the Constitution (Forty-Fourth Amendment) Act, 1978 w.e.f. 20.06.1979. [Paras 13.4 and 13.6][919 E-F; 923 C-D]
Deokinandan Prasad v. State of Bihar (1971) 2 SCC
330 : [1971] 0 Suppl. SCR 634; D.S. Nakara and Ors. v. Union of India (1983) 1 SCC 305 : [1983] 2 SCR
165 – followed.
State of West Bengal v. Haresh C. Banerjee and Ors. (2006) 7 SCC 651 : [2006] 5 Suppl. SCR 620 – relied on.
5. The Respondent-State was unjustified in withholding 10% pension of the Appellant under administrative Circulars dated 22.08.1974 and 31.10.1974, and Government Resolution No. 3104 dated 31.07.1980 after the Appellant had superannuated on 31.03.2008. It is directed that 10% of the pension amount which had been withheld after superannuation on 31.03.2008 till 19.07.2012 is liable to be paid to the Appellant. [Para 14][923 EG]
6. After Rule 43(c) was inserted in the Bihar Pension Rules and brought into force on 19.07.2012, the State is empowered to legally withhold 10% of the pension amount of the Appellant, till the criminal proceedings in R.C. Case No. 48A/1996 are concluded. Consequently, the State will deduct 10% from the pension amount w.e.f. 19.07.2012 subject to the outcome of the criminal proceedings. [Para 14][923 G-H]
7. With respect to withholding of the full amount of gratuity, as per Rule 27 of the Bihar Pension Rules, “pension” includes “gratuity”. With the insertion of Rule 43 (c) in the statute book w.e.f. 19.07.2012, it is clear that gratuity also could not have been withheld under administrative circulars dated 22.08.1974 and 31.10.1974, and Government Resolution No. 3104 dated 31.07.1980. The State is directed to release 90% of the gratuity payable to the Appellant. The balance 10% will be released subject to the outcome of the criminal proceedings pending against him. [Para 15][924 A-C]
Vijay Kumar Mishra v. State of Bihar 2017 (1) PLJR 575; Arvind Kumar Singh v. State of Bihar & Ors. etc. etc. (2018) 159 FLR 143 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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