In present case, Supreme Court through the bench comprising Justice U.U. Lalit and Justice Indu Malhotra held that pension of an employee cannot be withheld by administrative instruction. It further held that pension and gratuity are not mere bounties, or given out of generosity by the employer. The facts, issues, arguments and decision of the Supreme Court are as follows:
In present case, Dr. Hira Lal, an appellant was appointed to the post of Touring Veterinary officer (TVO) at Pawana, by State of Bihar, the respondent in present case. During active service of the appellant, he was made an accused in the Fodder Scam lodge by the CBI in R C case No.48A/1996 in which charge-sheet was filed against him on 21.11.2003.
The cognizance of the offence was taken by Special Judge, CBI, Animal Husbandry. Under
Rule 49(a) of the Civil Services (Classification, Control & Appeal) Rules, 1930, which was in force prior to the enforcement of the Bihar Government Servant (Classification, Control &
Appeal) Rules, 2005, the appellant was placed on suspension on 31.05.2002 till 31.03.2008, on which appellant attained age of superannuation.
On attained age of superannuation, the state government by its order dated 17.09.2008 sanctioned payment of 90% of the provisional pension of the appellant and withheld 10% of the pension, entire gratuity, leave encashment and GPF on account of pending criminal proceedings.
Aggrieved by this action of the State Government, the appellant filed writ petition in the High Court Of Patana praying for writ of mandamus for directing Respondent to pay full pension, gratuity, leave encashment, and General Provident Fund along with interest, where single judge of the High Court dismissed writ petition on 23.01.2013 holding that the claim of full pension and gratuity until conclusion of the criminal proceedings was untenable. Since the order of suspension was not revoked till the age of superannuation, the criminal proceedings would be deemed to be continuing during this entire period as per Rule 43(b) of the Bihar Pension Rules.
Aggrieved by order of High Court, the appellant preferred LPA, which was dismissed by division bench of the high court on 21.03.2017. Further, the review petition was filed by the appellant which was dismissed by the high court. Being aggrieved by the decision of division bench, the appellant has filed Special leave petition in the Supreme Court.
Whether the State of Bihar was justified in withholding 10% pension and full gratuity of the Appellant under Circulars dated 22.08.1974 and 31.10.194, and Government Resolution dated 31.07.1980, on the ground of pending criminal proceedings?
Arguments advanced by appellant:
In the Supreme Court, the contentions of the appellant were as follow:
- The Bihar Pension Rules, 1950 does not prohibit payment of full pension and gratuity to a retired Government servant against whom criminal proceedings were pending.
- As per Rule 43(b) of the Bihar Pension Rules is not applicable, until the delinquent employee is found to be guilty of grave misconduct in a departmental or judicial proceedings or to have caused pecuniary loss to the Government by misconduct or negligence.
- The appellant further placed reliance on the State of Jharkhand vs. Jitendra Kumar Srivastava and Ors, wherein it has been that Rule 43(b) does not permit withholding of pension and gratuity when departmental or judicial proceedings are still pending.
- It was further contended that government resolution of 31.07.1980 is an executive instruction, thus has no force of law and could not take away the right to receive pension, which is constitutional right under Article 300A .
Arguments advanced by the respondent:
The State Of Bihar filed counter-affidavit and stated that
- A sum of Rs.12,78,711/- towards G.P.F and Rs.1,35,256/- towards leave encashment had since been paid to the Appellant on 15.01.2009 and 03.02.2009 respectively.
- The State Of Bihar justified its stand on the basis of the circular dated 22.08.1974 and 31.10.1974 issued by the Finance Department read with Government Resolution dated 31.07.1980, which lays down that if the government servant retires under suspension, he will not be entitled to the payment of full pension and gratuity and at the best would get 90% of provisional pension till the conclusion of the departmental or judicial proceedings.
After considering relevant statutory provisions, the court came to the conclusion that 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, which were not issued in exercise of the power under Article 309 of the Constitution and cannot be said to have the force of law after relying on its earlier decision State of Jharkhand vs. Jitendra Kumar Srivastava.
The court further opined,
“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 by a Constitution bench of this Court in Deokinandan Prasad v. State of Bihar, which was followed in D.S. Nakara. v. Union of India.
The court held that gratuity could not be withheld under administrative circulars and the Respondent was unjustified in withholding 10% pension of the Appellant and directed that such amount should be paid to the appellant within a period of 12 weeks. After inserting rule 43(c) in the Bihar Pension Rules , the State is empowered to legally withhold 10% of the pension amount of the Appellant, subject to the decision of the criminal proceedings in R.C. Case No. 48A/1996.
Edited by Pragash Boopal
Approved & Published – Sakshi Raje
Dr. HiraLal Versus State Of Bihar &Ors (Civil Appeal No.1677-1678 of 2020)
 (2013) 12 SCC 210
 (2013) 12 SCC 210
 (1983) 1 SCC 305