Florence Chaudhari vs State of Madhya Pradesh and another

G.P. Singh, C.J.—By this petition under Article 226 of the Constitution, the petitioner, Dr. Mrs. F. Chaudhari seeks to challenge the order of the State Government, dated 9th January 1973, by which the petitioner''s pension and gratuity have been reduced respectively by 25 and 10 per cent.

The petitioner started her career as a civil servant in the Central Provinces. She continued in the service of the erstwhile State of Madhya Pradesh till reorganization of States in 1956 and thereafter of the present State of Madhya Pradesh till 31st August 1970 when she retired on attaining the age of 55 years. In 1967-68 the petitioner was posted as Director of Public Instructions (D. P. I.). School matting of the value of about Rs. 16 lacs was purchased by the Education Department through the petitioner in that year from M/s Raj Kishan Gupta of Ghaziabad. There were many irregularities in the purchase of school matting. The State Government framed number of charges against M.H. Rao, Secretary, Education Department, B.L. Vijaywargiya Deputy Secretary, Finance Department, the petitioner who was then D. P. I., B.L. Goyal, Divisional Superintendent of Education, Bhopal and Bhagwati Prasad, Asstt. D. P. I. The enquiry against these officers was entrusted to Shri V.R. Newaskar, a retired Judge of the High Court, who was authorised to hold a joint enquiry on the charges against these officers. Later on, the enquiry against M.H. Rao and B.L. Vijaywargiya was separated, as Rao happened to be an I. A. S. Officer and was governed by different rules. In the joint enquiry against the petitioner, B.L. Goyal and Bhagwati Prasad, the Enquiry Officer held that certain charges were proved. The Report of the Enquiry Officer was accepted by the Government. The Government issued a show cause notice to the petitioner why the penalty of reducing her pension and gratuity be not imposed. The petitioner submitted her reply to the show cause notice. After considering the reply to the show cause notice and after obtaining the advice of the Public Service Commission, the Government passed the impugned order.

To understand the nature of the findings reached by the Enquiry Officer which were accepted by the Government, it is necessary to State some more facts. Out of the expected saving in the budget for the financial year 1967-68 the State Government sanctioned a sum of Rs. 20 lacs for the purchase of school matting, black-boards, buckets etc. Out of this amount, Rs. 3.20. lacs were allotted to Tribal Welfare Department and Rs. 16.80 lacs to the Education Department. The proposal for the sanction of this amount was made towards the end of the year 1967, but the actual sanction by the Government was made on 13th February 1968. The sanction was slightly revised on 6th March 1968, The purchase was directed to be made in accordance with the Store Purchase Rules. The bulk of the amount sanctioned was to be utilized for the purchase of school matting. In anticipation of the sanction of the Government, a Central Purchase Committee was constituted for making purchases. This Committee consisted of three members, viz., the Education Secretary or his nominee, the Finance Secretary or his nominee and the D. P. I., i.e., the petitioner. A tender notice dated 1st February 1968 was issued as directed by the petitioner inviting tenders for purchase of 6� lac meters of school matting. These tenders were opened and scrutinized on 16th February 1968. The Purchase Committee approved the sample and rate (Rs. 1.35 per meter) of M/s Raj Kishan Gupta of Ghaziabad and their tender was accepted. Further, on the suggestion of the petitioner the following decision was also taken :

In view of the urgent requirements of Tat Patti for schools and lack of time at our disposal, it is proposed by the Director of Public Instructions that maximum utilization of the allotment available can be ensured if the time likely to be consumed in transportation of Tat Pattis to the 9 Divisional Head-quarters is saved by allotting a senior officer of the department to reach the factory/godown of the firm, check the material with the help of the sample before it is despatched, take possession of the supply and get it despatched to the 9 Educational Divisions provided that the firm bears the extra cost of transport and expenses of delivery at the 9 Educational Stores as per conditions of the tender. This will meet the usual audit objection against making payments before taking possession of the goods. The proposal was accepted by the Committee, as it would also ensure the quality of supply and avoid lapse of the amount on account of likely rejections at the Divisional level and consequential delay in payment.

As a result of the acceptance of tender of M/s Raj Kishan Gupta, an order was placed on 17th February 1968 for supply of 6� lac meters of school matting by 15th of March 1968. M/s Raj Kishan Gupta executed an agreement on 23rd February 1968. On 20th March 1968, another order for supply of additional quantity of 5 lac meters was placed by the petitioner with M/s Raj Kishan Gupta without inviting fresh tenders. On 23rd March 1968, M/s Raj Kishan Gupta''s representative sought extension of time for supplying matting which was allowed by the petitioner upto 31st March 1968. Goyal (D. S. E.) was sent to Calcutta by the petitioner to verify the stock after examining the same and to send intimation, to the petitioner after verification. On 27th March 1968, the petitioner prepared a note in which she first quoted the decision of the Purchase Committee which we have earlier reproduced and then stated as follows :

In accordance with this decision, a senior officer Shri B.L. Goyal, DSE was directed to proceed to the source of supply (Kharda Mills, Calcutta) to check up the stock position ready for despatch to the different divisional headquarters as per quantity indicated in the supply order. A telegram (copy placed below) has been received from him and in addition to this, he had informed me on the telephone that he has taken stock of the quantity and as soon as facilities are available and the situation in the town comes to normal the quantity of the order will be despatched in his presence at the cost of the dealer. In view of this, the bills of the supply to the different divisional headquarters will be passed and money drawn before 31-3-68 and kept in safe custody in the form of bank-draft which will be released to the dealer when the material actually reaches the 9 Educational stores as per conditions of the tender. This is for your kind information.

This note was sent for information to the Education Secretary and the Minister for Education and was signed by them on 27th and 28th March 1968. The school matting of the value of Rs. 44,524.35 only was actually received in Bhopal Division within 31st March 1968 and the rest of the matting was received thereafter in April, May and June. The suppliers submitted all their bills before 27th March 1968 and the money was withdrawn on these bills by the petitioner from the treasury in the form of bank drafts.

The petitioner was served with 12 charges on 4th November 1968. Justice Newaskar was appointed Enquiry Officer on 14th August 1969. In his report which he submitted on 10th February 1971 the Enquiry Officer held the petitioner guilty of charges Nos. 5, 7, 8, 10, 11 and 12 and technically guilty of charge No. 9. It was on the basis of the findings on these charges that the Government issued the show cause notice on 5th May 1972 and passed the final order on 9th January 1973.

The charges found proved against the petitioner and the findings, in brief, on the said charges are as follows :

Charge No. 5: She sent Shri Beharilal Goyal, Divisional Superintendent of Education, Bhopal to Calcutta for scrutiny and yet did not obtain detailed report about his scrutiny. In this manner she has utilised the service of a Government servant without any public benefit and thereby misused her position.

Finding: The Enquiry Officer held in respect of this charge that the decision of the Purchase Committee on 15th February 1968 was that a senior officer be sent to Calcutta to check the material as being in accordance with the sample, to take its possession there at Calcutta and to have it despatched to the Divisional Headquarters before the end of the financial year. This decision was taken with a view to save time likely to be consumed in transportation of the material before taking possession of the goods so as to meet the usual audit objection against making payments before taking possession of the goods before the end of the financial year, i. e., 31st March 1968. The petitioner sent Goyal to Calcutta not to check the material and to take its possession but to send some report or message on the basis of which she would be justified in withdrawing the amount sanctioned for purchase of school matting. The petitioner did not get any detailed report about what scrutiny Goyal had made and she acted on the basis of a cryptic or equivocal telegram and telephonic message without proper justification. The petitioner took inconsistent positions--once saying that Goyal was sent pursuant to the resolution of the Purchase Committee dated 16th February 1968, and at another time that he was sent pursuant to the letter of Shri B.D. Agarwal who asserted that the entire goods were ready for delivery but had been detained due to booking difficulties, labour trouble etc. It was indiscreet on the part of the petitioner to send Goyal to Calcutta at the expenses of the dealer merely to ascertain the stock position of the matting ready for delivery when the responsibility was of the dealer to secure supply at the Divisional Headquarters at his expense within time. In the opinion of the Enquiry Officer, the charge was substantially made out.

Charges Nos. 7 & 10: She gave orders for payment of bills amounting to Rs. 15,52,000 without proper scrutiny and in this way she has caused serious damage to the Government interest.

She has committed grave irregularity and unauthorized act in withdrawing the entire sanctioned amount from the bank before 31st of March 1968 for securing payment of the bills of school matting and keeping the same in deposit.

Finding: The matting only of the value of Rs. 44,524-35 was supplied before 31st of March 1968, The withdrawal of the remaining amount of Rs. 15,07,975.65 by the petitioner on 27th March 1968 for payment on account of supplies that were made after 31st of March 1968 was highly irregular and in contravention of Rule 284 of the Madhya Pradesh Treasury Code and Rule 70 of the Madhya Pradesh Financial Code. Rule 284 of the Treasury Code provides: "No money shall be drawn from the Treasury unless it is required for immediate disbursement. It is a serious irregularity to draw advance from the treasury in anticipation of demands or to prevent the lapse of budget grants, and persons at fault render themselves liable to disciplinary action for such drawal." Rule 70 of the Financial Code reads as follows: "A sanction for any fresh charge which has not been acted on for a year must be held to have lapsed unless it is specifically renewed.

The Government had issued a warning bringing to the notice of the department that these rules are followed in their breach and that this should not be done and that if it was so discovered, the officers concerned would be proceeded against for disciplinary action.

Charges Nos. 8 & 11: She gave permission to supply the school matting beyond the time limit laid down in the tender notice without scrutiny. In this way she by misusing her position secured for tenderer undue financial gain.

She neither secured deposit of 5% of the entire amount, namely, Rs. 43,875 as per term No. 6 of the tender notice No. 1 of 1968; nor did she take any step for its non-compliance by attaching and forfeiting- the entire earnest money Rs. 10,000. In this way she has misused her position and caused financial loss to the Government.

Finding: The petitioner was wrong in not insisting upon the deposit of security amount of Rs. 43,875 in respect of the first order. There was serious laxity on the part of the petitioner in granting the dealer extension upto 25th June 1968, beyond 15th March 1968, which was the final date for the entire supply. The alleged imposition of fine by the petitioner at Rs. 50 per day could hardly be considered sufficient in the circumstances of the case. The total amount of this penalty which was imposed came to Rs. 43,000 when the amount liable to be forfeited was Rs. 53,875 (Rs. 43,875 security and Rs. 10,000 earnest money) only in respect of the first order for 6.1/2 lac meters. The amount of security in respect of 5 lac meters should also have been got deposited and forfeited to a reasonable extent.

Charge No. 12: She, without calling for the tenders and without securing any agreement in writing, illegally gave an order for the supply of 5 lac meters of school matting as per terms and conditions of tender Notice No. 1 of 1958. At the same time, she took no step to forfeit the security deposit as well as the earnest money as per conditions of the tender notice. In this way she misused her position in securing undue profit to the tenderer and loss to the Government.

Finding: There was no justification whatsoever for dispensing with the requirement of Rule 2 of Appendix 5 of the Madhya Pradesh Financial Code, Vol. II, which made it obligatory on the part of the purchasing authority to call for tenders for the second order of 5 lac meters. No formal agreement in writing was obtained from the suppliers in respect of this order. No earnest money and security were deposited by the suppliers in respect of this order. As no tender was invited, the question of depositing earnest money did not arise, but the security deposit ought to have been insisted upon in view of term No. 6 of the tender notice and term No. 3 of the agreement dated 23th/29th February 1963. No question arose of forfeiting the earnest money or the security deposit in the case of the second order as no such deposit was made. The petitioner failed to carry out her duties in proper manner.

Charge No. 9: She paid the amount payable to Shri Raj Kishan Gupta to Shri B.D. Agarwal without valid authorisation letter. This resulted in a financial loss to the Government. In this way she has misused her position in helping Shri B.D. Agarwal in obtaining payment in an illegal manner in consequence of which financial loss was caused to the Government.

Finding: There was technical failure on the part of the petitioner, though it is not substantial.

The abovementioned findings of the Enquiry Officer which were accepted by the Government have not been challenged before us in this petition.

The learned counsel for the petitioner first submitted that as the petitioner retired from service on 31st August 1970 on attaining the age of 55 years, the disciplinary proceeding started against her could not be continued after that date and the penalty of reducing her pension and gratuity could not be ordered. In Madhya Pradesh Civil Services (Classification, Control and Appeal) Rules, 1966, reduction of pension and gratuity are not penalties which can be imposed on a Government servant. The disciplinary proceeding against the petitioner was not continued for imposing any penalty in the technical sense. The proceeding was continued only for deciding the question of pension. Pension is granted only after retirement and the question of its reduction can only arise after a person retires. It is true that in the show cause notice the proposed reduction of pension and gratuity was referred to as penalty; but the reference therein of penalty is only in the generic sense, and not in the technical sense as contemplated by rule 10 of the Civil Services (Classification, Control and Appeal) Rules. Even in the case of State of Punjab Vs. K.R. Erry and Sobhag Rai Mehta, , to which further reference will be made later in the course of this judgment, an order directing cut in pension is referred to as punishment in the generic sense. The State in its return has supported the impugned order under Articles 351-A and 470 of the Civil Service Regulations (C. S. R.). It is to be seen whether these articles justify the impugned order.

Article 351 of the C. S. R. as in force on the date when the petitioner retired was as follows:

351-A. The Provincial Government reserves to itself the right to order the recovery from the pension of an officer who entered service on or after the 15th April 1939 of any amount on account of losses found in judicial or departmental proceedings to have been caused to Government by the negligence or fraud of such officer during his service

Provided that

(1) Such departmental proceedings, if not instituted white the officer was on duty,

(i) shall not be instituted save with sanction of the Provincial Government;

(ii) shall be instituted before the officer''s retirement from service or within a year from the date on which he was last on duty, whichever is later;

(iii) shall be in respect of an event which took place not more than one year before the date on which the officer was last on duty; and

(iv) shall be conducted by such authority and in such place whether in India or elsewhere, as the Provincial Government may direct;

(2) All such departmental proceedings shall be conducted, if the officer concerned so requests, in accordance with the procedure applicable to departmental proceedings on which an order of dismissal from service may be made; and

(3) Such judicial proceedings, if not instituted while the officer was on duty, shall have been instituted in accordance with sub-clauses (ii) and (iii) of clause (1).

This Article was substituted by another Article with effect from 8th September 1972. It was, however, accepted by the learned Government Advocate that Article 351-A as in force on the date of retirement would govern the case of the petitioner, and not the new Article 351-A which came into force on 8th September 1972. The learned counsel for the petitioner and the learned Government Advocate in this respect did not dispute the correctness of the ruling of this Court in Dr. (Smt.) F. Chaudhury v. State of M.P. 1976 MPLJ 677. We need not, therefore, quote the new Article 351-A. The Article as it stood on the date of the petitioner''s retirement did not authorise the reduction of pension of a Government servant. It only authorised the recovery from the pension of any amount on account of losses found in judicial or departmental proceedings to have been caused to the Government by negligence or fraud during service. In the instant case, the impugned order cannot be construed to be an order directing recovery from the pension of any amount on account of losses caused to the Government by the negligence or fraud of the petitioner. The impugned order, therefore, cannot be supported on the basis of Article 351-A of the C. S. R.

The question then is whether the impugned order can be supported on the basis of Article 470 of the C. S. R. This article reads as follows:

(a) The full pension admissible under the rules is not to be given as a matter of course, or unless the service rendered has been really approved (see Appendix 8).

(b) If the service has not been thoroughly satisfactory, the authority sanctioning the pension should make such reduction in the amount as it thinks proper.

Provided that in cases where the authority sanctioning pension is other than the appointing authority, no order regarding reduction in the amount of the pension shall be made without the approval of the appointing authority.

The learned counsel for the petitioner contended that after the coming into force of the Madhya Pradesh New Pension Rules, 1951, Article 470 of the C. S. R. ceased to be applicable to the Government servants of Madhya Pradesh. In this connection, our attention was drawn to Rule 9 of these Rules which says that the Government will have the right to effect recoveries from a gratuity or pension under sections II and III in the same circumstances as recoveries can be effected from an ordinary pension under Article 351-A of the Civil Service Regulations. The argument was that the intention in making the New Pension Rules was to retain the effect of Article 351-A of the C. S. R. to pensions granted under sections II and III and not to keep it alive in respect of ordinary pension which was now regulated u/s I of these Rules. It was further argued that Article 351-A was retained under the new Rules for a limited purpose, but there was no reference to Article 470, which meant that it had no application to any pension granted under the New Pension Rules. In our opinion, the contention raised by the learned counsel for the petitioner about the non-applicability of Article 470 of the C. S. R. is entirely without any substance. Chapter XVIII of the C. S. R. deals with condition of grant of pension. Pensions are divided into four classes by Article 424 of section I. These four classes of pensions are: (a) Compensations; (b) Invalid pensions; (c) Superannuation pensions; and (d) Retiring pensions. Compensation pension is dealt with in Article 426 of section II, invalid pension is dealt with in Article 444 of section III; superannuation pensions are dealt with in Article 458 of section IV; and retiring pensions are dealt with in Article 455 of section V. The amount of these pensions is regulated by Article 468 read with Articles 474 to 485. The New Pension Rules, 1951, were made under Article 309 of the Constitution by the Governor of Madhya Pradesh. The Governor was pleased to direct that "the existing pension provisions contained in the Civil Service Regulations, in their application to persons appointed to services and posts in connection with the affairs of the State, shall be modified to the extent indicated" in the New Pension Rules. The first Rule 2 of Section I of these Rules only effected a change in the amount of superannuation, invalid, retiring and compensation gratuity and pension. It did not make any change regarding the conditions on which these pensions are granted or other rules regulating these pensions. What was intended to be affected was the amount of pension as regulated by Articles 474 to 485 of the C. S. R. The second Rule (2) and Rule (3) of the New Pension Rules provide for termination of the service of a Government servant on completion of 20 years and 25 years of qualifying service respectively, Rule 4 of section I provides for the grant of pension in such cases. Section II of these Rules provides for death-cum-retirement gratuity and section III for family pension. Rule 9 of section VII makes applicable Article 351-A to pension provisions contained in sections II and III. Now, the pension provisions in sections II and III are new provisions which are not contained in the C. S. R. It was for this reason that by rule 9 of Section VII, Article 351-A was made applicable to these pensions. As regards other pensions, viz., superannuation, invalid, retiring and compensation pensions, the New Pension Rules only modify the quantum and substitute a New scale in place of the scale of pension and gratuity mentioned in Articles 474 to 485 of the C. S. R. The provisions in the C. S. R. continue in so far as they are not modified by the New Pension Rules. Article 470 was, in no way, modified and, therefore, it continues to be in force and applies also to Government servants in respect of whom the amount of superannuation pension is determined u/s I of the New Pension Rules. It is well settled that the presumption is always against an implied repeal. The presumption is rebutted when it can be shown that the new provisions cannot stand along with the old provisions. We do not find any difficulty in the New Pension Rules and Article 470 of the C. S. R. standing side by side. Article 470, therefore, can be enforced against the petitioner.

The learned counsel for the petitioner then contended that the intention behind Article 470 (b) of the C. S. R. was to see the entire service record and it was only when after a perusal of the entire service record it could be said that the service had been thoroughly unsatisfactory that action could be taken for reducing the pension. The learned counsel, in support of his argument, relied upon the case of K.S. Rajasekhariah v. State AIR 1968 Mys. 206 and that of State of Punjab Vs. K.R. Erry and Sobhag Rai Mehta,

The language used in Article 470 (b) is that "if the service had not been thoroughly satisfactory, the authority sanctioning the pension should make such reduction in the amount as it thinks proper". The words "if the service has not been thoroughly satisfactory" cannot be equated with the words "if the service has been thoroughly unsatisfactory." The dictionary meaning of the word "thoroughly" is "in every part or detail; fully; completely; entirely; perfectly". [See Shorter Oxford Dictionary (1935) Vol. 2, P. 2177.] The words "has not been thoroughly satisfactory" mean that the service has not been completely satisfactory, i.e., has not been without any blemish. A person''s service record may be generally good and his service may be generally satisfactory; but if he, for a certain period, say prior to his retirement, makes serious lapses and is guilty of serious charges, then the service of such an officer cannot be said to be thoroughly satisfactory within the meaning of Article 470 (b). This was the position in the instant case. The Government did not rely upon the previous record of the petitioner. We have, therefore, to assume that previous to these charges her service was satisfactory. But in view of the charges, which were serious and which were proved against the petitioner in the enquiry by the Enquiry Officer, it is obvious that the petitioner''s service was not thoroughly satisfactory. The Government, therefore, acted within its jurisdiction under Article 470 to reduce the petitioner''s pension as it thought property It is true that the Government did not state in so many words that the petitioner''s service was not thoroughly satisfactory; but that finding is implicit when the Government accepted the findings of the Enquiry Officer on the charges proved against the petitioner and proposed to reduce the pension and gratuity of the petitioner. In the Mysore case of K.S. Rajasekhariah, relied upon by the learned counsel for the petitioner, the learned Judges observed at page 208 of the report that "Government did not form the opinion that the service of the petitioner was thoroughly unsatisfactory" and in the absence of a finding to that effect, the reduction of the pension of the petitioner was beyond the competence of Government. These observations no doubt support the argument of the learned counsel; but the error, if we may so with great respect, which lies in these observations is that they equate the words "the service has not been thoroughly satisfactory" with the words "the service was thoroughly unsatisfactory". As earlier pointed out by us, that is not the meaning of the relevant words. Even if the service of a particular officer was, to a large extent, satisfactory; yet if he committed some serious misconduct at some stage in his career, then it may be proper to say that the service of such an officer has not been thoroughly satisfactory, although it would not be proper to say that his service was thoroughly unsatisfactory. As earlier explained by us, the words "the service has not been thoroughly satisfactory" mean that it has not been completely satisfactory or, in other words, without any blemish. We are unable to agree with the view taken by the Mysore High Court.

In the Supreme Court case of K.R. Erry which dealt with the corresponding provisions of the Punjab Civil Service Rules, all that was decided was that before a cut in pension is ordered, the officer concerned should be given reasonable opportunity to show cause in the instant case, full opportunity was given to the petitioner to meet the charges. An opportunity was also given to show cause why her pension and gratuity be not reduced. There was no violation of any principle of natural justice by the Government in passing the impugned order. The learned counsel for the petitioner drew our attention to paragraph 18 of the judgment of the Supreme Court in K.R. Erry''s case. The observations in that paragraph go to show that if lapses were either overlooked or condoned and the officer concerned obtained successive promotions to higher posts in spite of those lapses, such lapses could not justify a severe cut in pension. Even accepting that legal position, it is of no avail to the petitioner. In the instant case, the petitioner''s lapses were not condoned. After the lapses were discovered, a departmental enquiry was instituted against her and it is not her case that the Government had at any stage condoned the lapses. The lapses being serious, the petitioner''s service cannot be taken to be without any blemish, and it was open to the Government to hold that in view of these lapses the petitioner was not entitled to her full pension and that reduction in her pension and gratuity should be ordered.

It was also contended that Article 470 of the C. S. R. did not authorise reduction of gratuity but only of pension and, therefore, the impugned order was invalid to the extent it reduced the petitioner''s gratuity. This contention is completely met by Article 41 which defines pension to include gratuity.

The petition fails and is dismissed, but without any order as to costs. The security amount be refunded to the petitioner.