K.C. Gupta vs The State of Haryana

R.P. Sethi, J.—Whether during the pendency of contemplated departmental enquiry a retired civil servant can be denied retiral benefits? Is a question of law required to be determined in this appeal. The finding of the learned Single Judge returned vide the judgment impugned in this appeal has been assailed mainly on the ground that mere pendency of departmental enquiry against a retired employee would not entitle the State or the employer to withhold the retiral benefits.

Some of the facts giving rise to the filing of the present appeal are that the petitioner who rendered 34 years of claimed meritorious government service retired on attaining the age of superannuation on 31.10.1978 but on the plea of pendency of some enquiry was not paid retiral benefits. It transpires that in August, 1974 the petitioner who was an Executive Engineer was sent on deputation to the respondent-corporation and held the charge of Rori Lining Division No. 5 from 15.9.1974 to 25.1.1977 and was thereafter transferred to the head office of the respondent-corporation till the date of his retirement. After his retirement he was served with a charge-sheet under Rule 7 of the Punjab Punishment and Appeal Rules, 1952 on 4.11.1978 in respect of some accounts irregularities alleged to have been committed in Rori Lining Division No. 5 during his incumbency on the work pertaining to lining of various water courses executed on top priority basis to achieve the fixed targets. The petitioner submitted vide his reply dated 17.11.1978 that the allegations contained in the charge sheet were false, fictitious, frivolous, baseless and arbitrary and untenable in the eyes of law. The Government conceded to the plea of the appellant and withdraw the charge sheet served upon him. However, on 21.1.1981 a revised charge sheet with respect to the same allegations was served upon the petitioner by invoking the provisions of Rule 2.2(b) of the Punjab Civil Services Rules, Vol. II. The allegations were appropriately replied on 6.2.1981 but no action was taken till 15.2.1983. On 15.2.1983 the respondent-State again dropped the revised show-cause notice. It was further alleged that the Government unnecessarily delayed the sanctioning of pension, gratuity, leave encashment and other pensionary benefits to the petitioner. The petitioner is Stated to have made various representations, annexed with the writ petition as Annexures P/4 to P/19, but with no effect. However, after over a year of the decision to drop the charge, the respondent-State sanctioned full pension and death-cum-retirement gratuity to the petitioner vide its letter dated 2.3.1984 and conveyed the same to respondent Nos. 2 and 3 with the direction to release the amount to the petitioner after with-holding a sum of Rs. 2470/- from the gratuity for having stood surety for an official. The Accountant General, Haryana with-held a sum of Rs. 2470/- from the gratuity of the petitioner as per directions of the Government. The petitioner thereafter filed a writ petition in this Court praying for the grant of relief directing the respondent to pay to the petitioner the difference of emoluments for the period 1.7.1977 to 31.10.1978 accrued to him on his having been permitted to cross the efficiency bar vide Annexure P/20, release salary of the petitioner for the month of October, 1978, pay him the amount with-held from the gratuity and interest on the delayed payment at the rate of 18 percent per annum of pension, gratuity, cash payment in lieu of unutilised earned leave, difference of emoluments, salary etc.

The claim of the petitioner was resisted on the ground that as the petitioner was alleged to have committed grave irregularities, the show-cause notice was served upon him and that the respondents were justified in with-holding the grant of retiral benefits. Service of two charge-sheets have not been denied but it is submitted that arrears of pay due to the crossing of efficiency bar from 1.7.1977 to 31.10.1978 were paid to the petitioner vide cheque dated 14.1.1986 and 12.2.1986. The pay for the period 16.10.1978 to 31.10.1978 was also stated to have been paid to the petitioner besides the amount payable for the leave preparatory to retirement. It was contended that the respondents had not wilfully and intentionally with-held the dues of the petitioner and that he was not entitled to the grant of relief of interest on the with-held amount.

The learned Single Judge agreed with the submissions of the respondent-State and vide the judgment impugned in this appeal held the petitioner not entitled to the grant of interest in view of the stand of the respondent-State and the submissions made at the bar that respondent No. 3 was contemplating to file a suit for the recovery of the loss suffered by it on account of the alleged irregularities committed by the petitioner while on deputation.

We have heard the learned counsel for the parties and perused the record.

Pension is recognised to be property under the provisions of the Constitution. The question as to whether the pension was a property attracting the old provisions of Article 31(1) of the Constitution (now Article 300A), came up for consideration before this Court in Bhagwant Singh v. Union of India, AIR 1962 Punjab, 503 wherein it was held that a right to have pension was the property of which the person could not be deprived of without adopting due course of law. It was further held that the State could not by executive order curtail or abolish the right of the public servant to receive pension. This view was later on affirmed by a Full Bench of this Court in K.R. Erry v. The State of Punjab ILR (1967) P & H 278 . The Supreme Court in Deokinandan Prasad Vs. The State of Bihar and Others, held as under :-

"We are of the opinion that the right of the petitioner to receive pension is property under Article 31(1) and by a mere executive order the State had no power to withhold the same. Similarly, the said claim is also property under Article 19(1)(f) and it is not saved by sub Article (5) of Article 19..."

In State of Madhya Pradesh Vs. Ranojirao Shinde and Another, , the Supreme Court held a right to a sum of money is property within the meaning of Article 19(1)(f) of the Constitution.

On the basis of the aforesaid judgments it can safely be held that retiral benefits payable to a civil servant not being a bounty and having been recognised as property cannot be denied to a person save by the authority of law as enshrined in Article 300A of the Constitution inserted by 44th Amendment. It follows, therefore, that the State cannot deprive a civil servant of his right to pension and other retiral benefits without specific legal authority which is required to be established in a Court of law notwithstanding how laudable motto behind such deprivation may be. "By an authority of law" as contemplated by Article 300A of the Constitution it is meant by or under the law made by the competent legislature and not by mere executive action of the State. The executive powers of the Government under the Constitution are subject to the limitations imposed by this Article. The mere contemplated departmental enquiry would, therefore, not deprive a civil servant of his right to get retiral benefits in accordance with the laws framed and without any further delay. A Full Bench of this Court in Ishar Singh v. State of Punjab 1993 (4) SLR 655 held that pensionary or retiral benefits could not be refused solely on the ground of initiation or intended initiation of disciplinary proceedings.

Under the statutory rules applicable in the case regarding grant of pension it is intended that no hardship is caused to an employee upon his retirement in the delayed payment of post retiral benefits. A duty is cast upon the authorities to see that the civil servant starts receiving pension on the date it became due and therefore, to deal with the cases of pension by giving high degree priority to the same. Every head of the Department is under a statutory obligation to undertake the work of preparation of pension papers in the form PEN 1 two years before the date on which the government servant is to retire on superannuation. The head office has been directed to divide the period of preparatory work of two years in the manner provided vide Rule 9.5. The pension Sanctioning Authority is required to forward to the Audit Officer the requisite forms duly completed with a covering letter along with the service book of the government employee fully completed for verification. Any circumstance which has relevance on the amount of pension admissible is required to be brought to the notice of the Audit Officer promptly and such authority is required to determine the qualifying years of service and the emoluments qualified for pension in accordance with the information available in the official record. Every case of delayed payment of gratuity is required to be considered by the administrative department and when it is found that the delay was caused on account of administrative lapse, the Department is obliged to make a recommendation to the Administrative Department for payment of interest.

In the instant case, the appellant retired on 31.10.1978 on attaining the age of superannuation when no departmental enquiry or action was pending against him. The charge-sheet is shown to have been served upon him on 4.11.1978 which was appropriately replied on 17.11.1978. No action appears to have been taken by the respondents for about two years and ultimately the charge-sheet was withdrawn in the year 1980. Again after waiting for a long period, fresh show cause notice of holding enquiry for the same charges was served upon the appellant on 31.1.1981 which was also appropriately replied on 6.2.1981 and the government once again dropped the disciplinary proceedings on 15.2.1983. From the conduct of the respondents it is established that the appellant was denied his valuable right without adopting due course of law or attributing him any act of commission or omission. The respondents have miserably failed to show any bona-fides in their action in not paying the retiral benefits to the appellant for a sufficient length of time. The learned Single Judge appears to have been persuaded to come to the conclusion that as some enquiry was contemplated against the appellant, the respondents were justified in withholding the retiral benefits payable to him. The writ petition appears to have been dismissed upon the observations that, "respondent No. 3 is contemplating to file a suit for recovery of the loss suffered by it on account of the irregularities committed by the petitioner while on deputation with it." It has been conceded before us that no such suit has been filed against the appellant till date. The respondents have, therefore, wilfully delayed the payment of the retiral benefits to the appellant for which they are liable to compensate him by paying interest on the delayed payments. They are further under an obligation to pay interest in view of the Government instructions issued vide letter No. FD-Haryana No. 1/2/74-83-3-FR-II dated 23.5.1990. Learned counsel for the appellant has submitted that as per the aforesaid instructions his client is entitled to interest at the rate of 18 per cent per annum. However, keeping in view the facts and circumstances of the case, and the fact that the instructions were issued in the year 1990 we are of the opinion that grant of interest at the rate of 12 per cent per annum, would meet the ends of justice.

Under the circumstances, the appeal is allowed by setting aside the judgment of the learned Single Judge and a command is issued to the respondents to pay interest to the appellant at the rate of 12 per cent per annum from the date the retiral benefits became due till they were actually paid to him, The amount of interest is directed to be paid to the appellant within a period of three months. The appellant is also entitled to costs which are assessed at Rs. 500/-.