DR. HIRA LAL versus STATE OF BIHAR & ORS. on 18 February 2020

DR. HIRA LAL

v.

STATE OF BIHAR & ORS.

(Civil Appeal Nos. 1677-1678 of 2020)

FEBRUARY 18, 2020

[UDAY UMESH LALIT AND INDU MALHOTRA,JJ.]

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 writpetition – Single Judge of High Court dismissed the petition – Orderaffirmed in LPA – Appeal to Supreme Court – Held: Rule 43(b) ofBihar Pension Rules, 1950 which provides for withholding ofpension does not cover a situation where judicial or departmentalproceedings are pending – The Circulars and the GovernmentResolution being administrative/executive orders (not issued inexercise of the power u/Art. 309 of Constitution) have no force oflaw – Right to receive pension and gratuity are right to propertyprotected under Art. 300A of the Constitution – It cannot be takenaway by an executive fiat or administrative instruction – In absenceof statutory Rules, State could not have withheld the pension andgratuity on the basis of executive instructions – Therefore, the Statewas unjustified in withholding 10% pension – However, afteramendment of r. 43 on 19.7.2012 by insertion of clause(c), State isempowered to withhold 10% of pension amount – State is directedto release the 10% of pension amount from 31.3.2008 (date ofsuperannuation) till 19.7.2012 – As per r. 27 of Pension Rules,‘pension’ includes ‘gratuity’ – Therefore, entire gratuity amount alsocould not have been withheld – State is directed to release 90% ofthe 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 empoweredto withhold or withdraw the whole or part of the amount of pension,

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Apermanently or for a specified period, if the pensioner was “foundto be guilty of grave misconduct” in any departmental or judicialproceeding, or to have “caused pecuniary loss to Governmentby misconduct or negligence”, during the tenure of his service.Rule 43(b) did not cover a situation where judicial or departmentalproceedings were pending. [Paras 11.2 and 12.1][913 G-H; 914-BA]

2. The Circulars dated 22.08.1974 and 31.10.1974, andGovernment Resolution No. 3104 dated 31.07.1980, were merelyadministrative instructions/executive orders. They were notissued in exercise of the power under Article 309 of theCConstitution and cannot be said to have the force of law. Theabsence of statutory rules permitting withholding of pension orgratuity, 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 KumarDSrivastava and Ors. (2013) 12 SCC 210 : [2013] 8 SCR177 – relied on.

3. The position has however changed with the amendmentto the Bihar Pension Rules on 19.07.2012 by the Governor ofBihar in exercise of the powers under Article 309 of theEConstitution, whereby Clause (c) has been inserted in Rule 43.Rule 43 (c) provides that where a departmental proceeding orjudicial proceeding is initiated during the service period of aGovernment servant, and prosecution had been sanctioned butnot concluded till superannuation, the provisional pension payableFshall be less than the maximum admissible amount, but shall inno 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 takenaway by a mere executive fiat or administrative instruction.Pension and gratuity are not mere bounties, or given out ofGgenerosity by the employer. An employee earns these benefitsby virtue of his long, continuous, faithful and un-blemishedservice. The right to receive pension of a public servant has beenheld to be covered under the “right to property” under Article31(1) of the Constitution. The right to receive pension has been H

held to be a right to property protected under Article 300A of theConstitution even after the repeal of Article 31(1) by theConstitution (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 SCC330 : [1971] 0 Suppl. SCR 634; D.S. Nakara and Ors.v. Union of India (1983) 1 SCC 305 : [1983] 2 SCR165 – followed.

State of West Bengal v. Haresh C. Banerjee and Ors.(2006) 7 SCC 651 : [2006] 5 Suppl. SCR 620 – reliedon.

5. The Respondent-State was unjustified in withholding10% pension of the Appellant under administrative Circulars dated22.08.1974 and 31.10.1974, and Government Resolution No. 3104dated 31.07.1980 after the Appellant had superannuated on31.03.2008. It is directed that 10% of the pension amount whichhad been withheld after superannuation on 31.03.2008 till19.07.2012 is liable to be paid to the Appellant. [Para 14][923 E-G]

6. After Rule 43(c) was inserted in the Bihar Pension Rulesand brought into force on 19.07.2012, the State is empowered tolegally withhold 10% of the pension amount of the Appellant, tillthe criminal proceedings in R.C. Case No. 48A/1996 areconcluded. Consequently, the State will deduct 10% from thepension amount w.e.f. 19.07.2012 subject to the outcome of thecriminal 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 bookw.e.f. 19.07.2012, it is clear that gratuity also could not have beenwithheld under administrative circulars dated 22.08.1974 and31.10.1974, and Government Resolution No. 3104 dated31.07.1980. The State is directed to release 90% of the gratuitypayable to the Appellant. The balance 10% will be releasedsubject to the outcome of the criminal proceedings pendingagainst him. [Para 15][924 A-C]

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AVijay Kumar Mishra v. State of Bihar 2017 (1) PLJR575; Arvind Kumar Singh v. State of Bihar & Ors. etc.etc. (2018) 159 FLR 143 – referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1677-1678 of 2020.

From the Judgment and Order dated 21.03.2017 of the High CourtDof Judicature at Patna in LPA No. 1529 of 2013 and order dated23.08.2017 in Civil Review No. 207 of 2017.

Sunil Kr., Sr. Adv., Himanshu Shekhar, Advs. for the Appellant.

Ms. Pratistha Vij, Abhinav Mukerji, Parthiv K. Goswami,EMs. Diksha Rai, Sibo Shankar Mishra, Mrs. Anil Katiyar, Advs. for theRespondents.

The Judgment of the Court was delivered by INDU MALHOTRA, J.

Delay condoned. Leave granted.F

1. The short issue which arises for consideration is whether theState of Bihar was justified in withholding 10% pension and full gratuityof the Appellant under Circulars dated 22.08.1974 and 31.10.194, andGovernment Resolution dated 31.07.1980, on the ground of pendingcriminal proceedings?G

2. The Appellant was appointed to the post of Touring VeterinaryOfficer (TVO) at Pawana, Bihar by the Respondent-State. While theAppellant was in active service, he was made an accused in the FodderScam lodged by the CBI in RC Case No.48A/1996 wherein a Charge-Sheet was filed against him on 21.11.2003. The Special Judge, CBI,H

Animal Husbandry took cognizance in the criminal case. The Appellantwas placed under suspension on 31.05.2002 under Rule 49(a) of theCivil Services (Classification, Control & Appeal) Rules, 1930, whichwere in force prior to the enforcement of the Bihar Government Servant(Classification, Control & Appeal) Rules, 2005. The Appellant continuedto remain under suspension till he attained the age of superannuation on31.03.2008.

3. On attaining the age of superannuation, the State Governmentvide Order dated 17.09.2008 sanctioned payment of 90% of theprovisional pension of the Appellant, and withheld 10% of the pension,entire gratuity, leave encashment and GPF on account of pending criminalproceedings.

4. Aggrieved by the action of withholding 10% pension and otherretiral benefits, the Appellant filed a Writ Petition before the Patna HighCourt praying for a writ of mandamus directing the Respondents to payfull pension, gratuity, leave encashment, and General Provident Fundalong with interest.

5. The Appellant inter alia contended that the Bihar PensionRules,1950 do not prohibit payment of full pension and gratuity to a retiredGovernment servant against whom criminal proceedings were pending.Rule 43(b) of the Bihar Pension Rules is not applicable, until the delinquentemployee is found to be guilty of grave misconduct in a departmental orjudicial proceedings or to have caused pecuniary loss to the Governmentby misconduct or negligence. Consequently, Rule 43(b) would not beapplicable during the pendency of criminal proceedings. Reliance wasplaced on the judgment of this Court in State of Jharkhand and Ors.vs. Jitendra Kumar Srivastava and Ors.[1], wherein it has been thatRule 43(b) does not permit withholding of pension and gratuity whendepartmental or judicial proceedings are still pending. It was furthercontended the Government Resolution dated 31.07.1980, being anexecutive instruction had no force of law, and could not take away theright to receive pension, which is recognised as a constitutional rightunder Article 300A of the Constitution.

6. The State of Bihar filed its Counter-Affidavit stating that a sumof Rs.12,78,711/- towards G.P.F and Rs.1,35,256/- towards leaveencashment had since been paid to the Appellant on 15.01.2009 and 1 (2013) 12 SCC 210

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A03.02.2009 respectively. The State justified its stand on the basis ofCirculars dated 22.08.1974 and 31.10.1974 issued by the FinanceDepartment read with Government Resolution dated 31.07.1980, whichlays down that if a government servant retires while under suspension,he will not be entitled to payment of full pension and gratuity, and at best,would be entitled to payment of 90% of the provisional pension till theBconclusion of the departmental or judicial proceedings. It further providedthat no gratuity or death-cum-retirement gratuity would be payable untilthe conclusion of the said proceedings, and the issuance of final ordersthereon.

7. The issue which remained for consideration was with respectCto withholding payment of 10% of the pension and full amount of gratuity.

8. The learned Single Judge of the High Court dismissed the WritPetition vide Judgment & Order dated 23.01.2013 holding that the claimof full pension and gratuity until conclusion of the criminal proceedingswas untenable both on facts, and in law. Since the order of SuspensionDdated 31.05.2002 was not revoked at any point of time till the Appellantattained the age of superannuation, the criminal proceedings would bedeemed to be continuing during this entire period as per Rule 43(b) ofthe Bihar Pension Rules. As per the Government Circulars dated22.8.1974 and 31.10.1974, and Government Resolution dated 31.7.1980,Ea conscious decision was taken by the State Government for temporarilywithholding 10% of pension and full amount of gratuity till conclusion ofthe departmental or judicial proceedings.

9. Aggrieved by the Order of the Single Judge, the Appellantpreferred an LPA, which was dismissed by a division bench of the HighFCourt vide impugned Judgment & Order dated 21.03.2017. The divisionbench followed the judgment in Vijay Kumar Mishra v. Stateof Bihar[2]on the interpretation of Rules 43(b) and (c) of the Bihar Pension Rules,and dismissed the LPA. The division bench held that the Appellant wouldbe required to await the outcome of the pending criminal case, before hebecomes entitled to payment of 10% pension and full amount of gratuity,Gwhich had been withheld.

The Review Petition preferred by the Appellant was dismissed asnot pressed videOrder dated 23.08.2017.

H2 2017 (1) PLJR 575

DR. HIRA LAL v. STATE OF BIHAR & ORS.[INDU MALHOTRA, J.]

10. Aggrieved by the judgment of the High Court, the Appellanthas filed the present SLP before this Court.

We have heard learned counsel for the parties, and haveconsidered the submissions made on their behalf.

11. Relevant Statutory Provisions

11.1 The Bihar Pension Rules, 1950 were enacted under Section241(2)(b) of the Government of India Act, 1935, and came into force on20th January, 1950.

Rules 27 and 43 (a) and (b) are set out hereunder:- “”27.Pension includes a gratuity.

“43 (a) Future good conduct is an implied condition ofevery grant of pension. The Provincial Government reserveto themselves the right of withholding or withdrawing apension or any part of it, if the pensioner is convicted ofserious crime or be guilty of grave misconduct. The decisionof the Provincial Government on any question of withholdingor withdrawing the whole or any part of a pension under thisrule, shall be final and conclusive.

(b) The State Government further reserve to themselves theright of withholding or withdrawing a pensionor any part ofit, whether permanently or for a specified period, and theright of ordering the recovery from a pension of the whole orpart of any pecuniary loss caused to Government if thepensioner is found in departmental or judicial proceeding tohave been guilty of grave misconduct; or to have causedpecuniary loss to Government by misconduct or negligence,-during his service including service rendered on reemploymentafter retirement:

11.2 A reading of Rule 43(b) would indicate that the StateGovernment was empowered to withhold or withdraw the whole or partof the amount of pension, permanently or for a specified period, if thepensioner was “found to be guilty of grave misconduct” in anydepartmental or judicial proceeding, or to have “caused pecuniary lossto Government by misconduct or negligence”, during the tenure of hisservice.

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A12. Circulars and Resolutions

12.1 Rule 43(b) did not cover a situation where judicial ordepartmental proceedings were pending.

The Respondent-State had issued two Circulars on 22.08.1974and 31.10.1974, under which a provision was made to pay 75% pensionBto an employee, who was facing a departmental or judicial proceeding atthe time of retirement. The Circulars provided that no gratuity or death-cum retiral gratuity would be paid during the pendency of the proceedings.

12.2 The Circular dated 22.08.1974 issued by the FinanceDepartment of the Government of Bihar reads as follows:C

“-SubjectPayment of pension to Government servants whoare under suspension or against whom departmental or judicialproceedings or enquiries have not been concluded on the date ofcompulsory retirement.

The question of sanctioning pension to Government servantswho are under suspension or against whom departmental or judicialproceedings or enquiries have not been concluded on the date ofcompulsory retirement has been under active consideration ofGovernment.

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2. The State Government have been pleased to decide thatE(i) where any departmental or judicial proceeding is instituted underrule 43(b) of Bihar Pension Rules a Government servant or wherea departmental proceeding is continued against an officer whohave retired on attaining the age of compulsory retirement, orotherwise, he shall be paid during the period commencing fromFthe date of his retirement to the date on which, upon conclusion ofsuch proceedings, final orders are passed 75% provisional pensionof the pension which would have been admissible on the basis ofhis qualifying service upto the date of retirement, or if he wasunder suspension on the date of retirement, upto the dateimmediately preceding the date on which he was placed underGsuspension, but no gratuity or death-cum-retirement gratuity shallbe paid to him until the conclusion of such proceeding and theissue of final orders thereon.

(ii) Payment of provisional pension may under the aboveprovision shall be adjusted against the final retirement benefits H

sanctioned to such officer upon conclusion of the aforesaidproceedings but no recovery shall be made where the pensionfinally sanctioned is less than the provisional or the pension isreduced or withheld either permanently or for a specified period.

3. The grant of pension under the aforesaid provision shallnot prejudice the operation of rule 139 of Bihar Pension Ruleswhere final pension is sanctioned upon the conclusion of theproceedings.

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.).”

12.3 Subsequently, a clarificatory Circular was issued on31.10.1974 which reiterated that provisional pension up to only 75%shall be paid till the conclusion of judicial or departmental proceedings.

The Circular dated 31.10.1974 reads as follows:

“Subject-Payment of pension to Government servants whoare under suspension or against whom departmental or judicialproceedings or enquiries have not been concluded on the date ofcompulsory retirement.

In Finance Department’s letter No. PC-11-40.28/74/9144F,dated 22.8.1974; which provided that a Government servant whohas retired and against whom, any departmental or judicialproceedings are instituted or are continued shall be paid provisionalpension to the extent of 75% of the admissible pension. Thepayment of provisional pension under the aforesaid orders ismandatory. But some administrative authorities appear to be underthe impression that in cases where the departmental proceedingsinstituted against a Government servant were for major penaltyand in which ultimately no pension might become payable on theconclusion of the proceedings after his retirement under rule 43of Bihar Pension Rules, even the provision need not be sanctioned.This view is against the letter and spirit of the said rules. All Headsof departments etc. are therefore requested to bring to the noticeof pension sanctioning authorities under them the correct positionof the rules as well as the intention of the State Government so A

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that the payment of 75% provisional pension is not denied to theretired Government servants.(Vide F.D. Memo No. PC-11-40-98/74-11260 F, dated 31.10.1974).”

12.4 The State Government issued Government Resolution No.B3014 on 31.07.1980, which reads as follows:

“-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 withholdor withdraw pension.

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(b) If any kind of departmental proceedings, criminal case,judicial enquiry etc. has not been initiated against any governmentservant till the date of his retirement then in that situation, thePension Sanctioning Authority shall not be empowered to withholdpension under any circumstances. Rule-43 of Bihar Pension Rulesis a Statutory Rule. Hence, the provisions contrary to it by differentdepartments and circulars in respect of obtaining clearancecertificate from Vigilance Department shall be deemed to becancelled automatically.

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(c) Where the final disposal of departmental or judicialproceeding initiated during the service period of any governmentservant is not possible till the date of his/her retirement, then actionto sanction provisional pension under provisions of Circular No.9144/f, dated 22-8-1974 and 11260F, dated 31-10-1974 of theFinance Department be initiated so that that the governmentservant going to retire may not face any difficulty. Provisionscontained in Clause 8(c) below shall not apply in matters of thiscategory. In the cases of this category, the amount of provisionalpension, as per rule, shall be less than the maximum amount ofpension admissible, but it shall not be less than 90 per cent in anycircumstance.”

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The Government Resolution No. 3104 dated 31.07.1980, providedthat where departmental or judicial proceedings were initiated duringthe service period of a Government servant, and were not concluded or H

finally disposed of till the date of retirement, then provisional pensionunder Circulars dated 22.08.1974 and 31.10.1974 would be paid. Theamount of provisional pension was however increased from 75% to 90%of the maximum amount of pension admissible.

13.1 In our considered view, the Circulars dated 22.08.1974 and31.10.1974, and Government Resolution No. 3104 dated 31.07.1980, weremerely administrative instructions/executive orders. They were not issuedin exercise of the power under Article 309 of the Constitution and cannotbe said to have the force of law.

The Government Resolution dated 31.07.1980 came up forconsideration before this Court in State of Jharkhand and Ors. vs.Jitendra Kumar Srivastava and Ors.[3]. After considering Rule 43(b)of the Bihar Pension Rules and Government Resolution No. 3104 dated31.07.1980, this Court held that the State had no authority or power towithhold the full amount of pension or gratuity of a Government servantduring the pendency of judicial or departmental proceedings. This Courtheld that:

“9. Having explained the legal position, let us first discussthe rules relating to release of Pension. The present case isadmittedly governed by the Bihar Pension Rules, asapplicable to the State of Jharkhand.Rule 43(b) of the saidPension Rules confers power on the State Government towithhold or withdraw a pension or part thereof under certaincircumstances. This Rule 43(b) reads as under:

…..

From the reading of the aforesaid Rule 43(b), followingposition emerges:

(i) The State Government has the power to withhold orwithdraw pension or any part of it when the pensioner is foundto be guilty of grave misconduct either in a departmentalproceeding or judicial proceeding.

(ii) This provision does not empower the State to invoke thesaid power while the department proceeding or judicialproceeding are pending.

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A(iii) The power of withholding leave encashment is notprovided under this rule to the State irrespective of the resultof the above proceedings.

(iv) This power can be invoked only when the proceedingsare concluded finding guilty and not before.

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11. Reading of Rule 43(b) makes it abundantly clear that evenafter the conclusion of the departmental inquiry, it ispermissible for the Government to withhold pension etc. ONLYwhen a finding is recorded either in departmental inquiry orCjudicial proceedings that the employee had committed gravemisconduct in the discharge of his duty while in his office.There is no provision in the rules for withholding of thepension/gratuity when such departmental proceedings orjudicial proceedings are still pending.

D14. …..A person cannot be deprived of this pension withoutthe authority of law, which is the Constitutional mandateenshrined in Article 300A of the Constitution. It follows thatattempt of the Appellant to take away a part of pension orgratuity or even leave encashment without any statutoryprovision and under the umbrage of administrative instructionEcannot be countenanced.

15. It hardly needs to be emphasized that the executiveinstructions are not having statutory character and, therefore,cannot be termed as “law” within the meaning of aforesaidArticle 300A. On the basis of such a circular, which is notFhaving force of law, the Appellant cannot withhold-even apart of pension or gratuity. As we noticed above, so far asstatutory rules are concerned, there is no provision forwithholding pension or gratuity in the given situation. Hadthere been any such provision in these rules, the position wouldhave been different.”

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[emphasis supplied]

It was held that pension is ‘property’ within the meaning of Article300A of the Constitution, and executive instructions which do not haveany statutory sanction cannot be termed as “law” within the meaning ofHArticle 300A. It was further held that in the absence of statutory rules permitting withholding of pension or gratuity, the State could not do soby way of executive instructions. It was observed that “So far asstatutory rules are concerned, there is no provision for withholdingpension or gratuity in the given situation. Had there been any suchprovision in these rules, the position would have been different”.

13.2 The position has however changed with the amendment tothe Bihar Pension Rules on 19.07.2012 by the Governor of Bihar inexercise of the powers under Article 309 of the Constitution, wherebyClause (c) has been inserted in Rule 43, which reads as follows:

“(c) Where the departmental proceeding or judicialproceeding, in which the prosecution has been sanctionedagainst such servant, initiated during the service period ofthe government servant, is not concluded till the retirement ofthe government servant, the amount of provisional pensionshall be less than the maximum admissible amount of pensionbut shall in no case be less than 90% (ninety percent).”

13.3 Rule 43 (c) provides that where a departmental proceedingor judicial proceeding is initiated during the service period of aGovernment servant, and prosecution had been sanctioned but notconcluded till superannuation, the provisional pension payable shall beless than the maximum admissible amount, but shall in no case be lessthan 90%.

13.4 It is well settled that the right to pension cannot be takenaway by a mere executive fiat or administrative instruction. Pension andgratuity 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.[4] The right to receive pension of apublic servant has been held to be covered under the “right to property”under Article 31(1) of the Constitution by a Constitution bench of thisCourt in Deokinandan Prasad v. State of Bihar[5], which ruled that:

“ 30. The question whether the pension granted to a publicservant is property attracting Article 31(1) came up forconsideration before the Punjab High Court in BhagwantSingh v. Union of India [AIR 1962 Punj 503]. It was heldthat such a right constitutes “property” and any interference 4 (2013) 12 SCC 210

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will be a breach of Article 31(1) of the Constitution. It wasfurther held that the State cannot by an executive order curtailor abolish altogether the right of the public servant to receivepension. This decision was given by a learned Single Judge.This decision was taken up in letters patent appeal by theUnion of India. Letters Patent Bench in its decision in Unionof India v. Bhagwant Singh [ILR 1965 Punj 1] approved thedecision of the learned Single Judge. The Letters Patent Benchheld that the pension granted to a public servant on hisretirement is “property” within the meaning of Article 31(1)of the Constitution and he could be deprived of the same onlyby an authority of law and that pension does not cease to beproperty on the mere denial or cancellation of it. It was furtherheld that the character of pension as “property” cannotpossibly undergo such mutation at the whim of a particularperson or authority.

31. The matter again came up before a Full Bench of thePunjab and Haryana High Court in K.R. Erry v. State ofPunjab [ILR 1967 Punj & Har 278]. The High Court had toconsider the nature of the right of an officer to get pension.The majority quoted with approval the principles laid downin the two earlier decisions of the same High Court, referredto above, and held that the pension is not to be treated as abounty payable on the sweet will and pleasure of theGovernment and that the right to superannuation pensionincluding its amount is a valuable right vesting in a governmentservant. It was further held by the majority that even though an opportunity had already been afforded to the officer onan earlier occasion for showing cause against the impositionof penalty for lapse or misconduct on his part and he hasbeen found guilty, nevertheless, when a cut is sought to beimposed in the quantum of pension payable to an officer onthe basis of misconduct already proved against him, a furtheropportunity to show-cause in that regard must be given to theofficer. This view regarding the giving of further opportunitywas expressed by the learned Judges on the basis of therelevant Punjab Civil Service Rules. But the learned ChiefJustice in his dissenting judgment was not prepared to agreewith the majority that under such circumstances a further DR. HIRA LAL v. STATE OF BIHAR & ORS.[INDU MALHOTRA, J.]

opportunity should be given to an officer when a reductionin the amount of pension payable is made by the State. It isnot necessary for us in the case on hand to consider thequestion whether before taking action by way of reducing ordenying the pension on the basis of disciplinary action alreadytaken, a further notice to show-cause should be given to anofficer. That question does not arise for consideration beforeus. Nor are we concerned with the further question regardingthe procedure, if any, to be adopted by the authorities beforereducing or withholding the pension for the first time afterthe retirement of an officer. Hence we express no opinionregarding the views expressed by the majority and the minorityJudges in the above Punjab High Court decision on thisaspect. But we agree with the view of the majority when it hasapproved its earlier decision that pension is not a bountypayable on the sweet will and pleasure of the Governmentand that, on the other hand, the right to pension is a valuableright vesting in a government servant.

33. Having due regard to the above decisions, we are of theopinion that the right of the petitioner to receive pension isproperty under Article 31(1) and by a mere executive orderthe State had no power to withhold the same. Similarly, thesaid claim is also property under Article 19(1)(f) and it is not-saved by subarticle (5) of Article 19. Therefore, it followsthat the order, dated June 12, 1968, denying the petitionerright to receive pension affects the fundamental right of thepetitioner under Articles 19(1)(f) and 31(1) of the Constitution,and as such the writ petition under Article 32 ismaintainable...”

13.5 The aforesaid judgment was followed in D.S. Nakara andOrs. v. Union of India[6] by another Constitution bench of this Court,which held that:

“20. The antiquated notion of pension being a bounty, agratuitous payment depending upon the sweet will or graceof the employer not claimable as a right and, therefore, no AB

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Aright to pension can be enforced through Court has been sweptunder the carpet by the decision of the Constitution Bench in7Deoki Nandan Prasad v. State of Bihar and Ors.: whereinthis Court authoritatively ruled that pension is a right andthe payment of it does not depend upon the discretion of theGovernment but is governed by the rules and a GovernmentBservant coming within those rules is entitled to claim pension.It was further held that the grant of pension does not dependupon any one’s discretion. It is only for the purpose ofquantifying the amount having regard to service and otherallied maters that it may be necessary for the authority toCpass an order to that effect but the right to receive pensionflows to the officer not because of any such order but byvirtue of the rules. This view was reaffirmed in State of Punjaband Anr. v. Iqbal Singh.8

29. Summing up it can be said with confidence that pensionDis not only compensation for loyal service rendered in thepast, but pension also has a broader significance, in that it isa measure of socio-economic justice which inheres economicsecurity in the fall of life when physical and mental prowessis ebbing corresponding to aging process and, therefore, oneis required to fall back on savings. One such saving in kindEis when you give your best in the hey-day of life to youremployer, in days of invalidity, economic security by way ofperiodical payment is assured. The term has been judiciallydefined as a stated allowance or stipend made inconsideration of past service or a surrender of rights orFemoluments to one retired from service. Thus the pensionpayable to a government employee is earned by renderinglong and efficient service and therefore can be said to be adeferred portion of the compensation or for service rendered.In one sentence one can say that the most practical raisond’etre for pension is the inability to provide for oneself dueGto old age. One may live and avoid unemployment but notsenility and penury if there is nothing to fall back upon.

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DR. HIRA LAL v. STATE OF BIHAR & ORS.[INDU MALHOTRA, J.]

31. From the discussion three things emerge: (i) that pensionis neither a bounty nor a matter of grace depending upon thesweet will of the employer and that it creates a vested rightsubject to 1972 Rules which are statutory in characterbecause they are enacted in exercise of powers conferred bythe proviso to Article 309 and clause (5) of Article 148 of theConstitution; (ii) that the pension is not an ex gratia paymentbut it is a payment for the past service rendered; and (iii) it is-a social welfare measure rendering socioeconomic justice to-those who in the heyday of their life ceaselessly toiled forthe employer on an assurance that in their old age they would”not be left in lurch..

13.6 The right to receive pension has been held to be a right toproperty protected under Article 300A of the Constitution even after therepeal of Article 31(1) by the Constitution (Forty-Fourth Amendment)Act, 1978 w.e.f. 20.06.1979, as held in State of West Bengal v. HareshC. Banerjee and Ors.[9].

13.7 The Division Bench of the Patna High Court in the impugnedjudgment has relied solely on the earlier decision of a co-ordinate benchof the Patna High Court in Vijay Kumar Mishra v. Stateof Bihar[10] todeny the reliefs sought by the Appellant.Pertinently, the judgment in VijayKumar Mishra was overruled by a Full Bench of the Patna High Courtin Arvind Kumar Singh v. State of Bihar & Ors. etc. etc.[11].

14. In view of the above, we hold that the Respondent-State wasunjustified in withholding 10% pension of the Appellant underadministrative Circulars dated 22.08.1974 and 31.10.1974, andGovernment Resolution No. 3104 dated 31.07.1980 after the Appellanthad superannuated on 31.03.2008.

We direct that 10% of the pension amount which had been withheldafter superannuation on 31.03.2008 till 19.07.2012 is liable to be paid tothe Appellant within a period of 12 weeks from the date of this Judgment.

After Rule 43(c) was inserted in the Bihar Pension Rules andbrought into force on 19.07.2012, the State is empowered to legally 9 (2006) 7 SCC 65110 2017 (1) PLJR 57511 2019 Lab IC 2937 (FB): (2018) 159 FLR 143

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Awithhold 10% of the pension amount of the Appellant, till the criminalproceedings in R.C. Case No. 48A/1996 are concluded. Consequently,the State will deduct 10% from the pension amount w.e.f. 19.07.2012subject to the outcome of the criminal proceedings.

15. With respect to withholding of the full amount of gratuity, weBfind that 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 withheldunder administrative circulars dated 22.08.1974 and 31.10.1974, andGovernment Resolution No. 3104 dated 31.07.1980.

CThe State is directed to release 90% of the gratuity payable to theAppellant within a period of 12 weeks from the date of this judgment.The balance 10% will be released subject to the outcome of the criminalproceedings pending against him in R.C. Case No. 48A/1996.

The Civil Appeals are allowed in the aforesaid terms.DAll pending Applications, if any, are accordingly disposed of.Ordered accordingly.

E

Kalpana K. Tripathy

Appeals allowed.

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