Satya Narayan Gupta vs State Of U.P. And 2 Others
2018 Latest Caselaw 2300 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

						Reserved on 15.5.2018.
 
						Delivered on 04.09.2018.
 
						Reportable.
 

 
Case :- WRIT - A No. - 11525 of 2018
 

 
Petitioner :- Satya Narayan Gupta
 
Respondent :- State Of U.P. And 2 Others
 
Counsel for Petitioner :- Rahul Srivastava,Shailendra Kumar Pathak
 
Counsel for Respondent :- C.S.C.
 

 
Hon'ble Mrs. Sunita Agarwal,J.

By means of the present petition, the petitioner seeks a writ of mandamus commanding the respondents to release full pension and all post-retiral dues and benefits to him w.e.f. the date of retirement i.e. 31.3.2016 alongwith interest for the delayed payment thereof.

It is contended by learned counsel for the petitioner that the petitioner attained the age of superannuation on 31.3.2016 from the post of Inspector Special Investigation Bureau (Cooperative), Kanpur Zone, Lucknow which was his last place of posting. During his service tenure, two criminal cases namely Case Crime No.14 of 2011 under Sections 216, 120-B IPC, Police Station Akbarpur, District Ambedkar Nagar and Case Crime No.157 of 2015 under Sections 13(1)(e) and 13(2) of Prevention of Corruption Act, 1988 Police Station Akbarpur, District Ambedkar Nagar had been lodged.

It is contended that in Criminal Case No.14 of 2011, a charge-sheet had been submitted before the competent court and the discharge application moved by the petitioner is pending consideration.

In another criminal case namely Case Crime No.157 of 2015, Police had submitted final report. However, the pension papers of the petitioner forwarded by the Superintendent of Police, Special Investigation Bureau, (Cooperative), Kanpur Zone had been returned by the Finance & Accounts Controller, U.P. Police Headquarter, Allahabad with the assertion that Case Crime No.157 of 2015 is being investigated by the Crime Branch and during pendency of the criminal case, as per the Government Orders dated 28.10.1980 and 28.7.1989, only interim pension was payable. The pension proposal shall be finalised after culmination of the proceedings of the criminal case.

On 20.11.2017, interim pension has been released to the petitioner but other retiral dues such as gratuity and provident fund have been withheld.

Placing reliance upon the judgments of this Court and that of the Apex Court in the compilation of judgments given by learned counsel for the petitioner, it is contended that withholding of final pension and other retiral dues such as gratuity etc. is an illegal action on the part of the respondents. It is contended by the learned counsel for the petitioner that pension and gratuity etc. can be withheld only in a proved case of gross misconduct or pecuniary loss to the Government by misconduct or negligence of the employee during his service. The power of withholding of retiral benefits under Regulation 351 of the Civil Service Regulations can be exercised in cases where there is specific and conclusive finding in a department or judicial proceedings in this regard. The said power cannot be exercised for withholding the post-retiral benefits during continuance of judicial proceedings.

Reference has been made to the judgment of the Apex Court in State of U.P. & Ors. v. Dhirendra Pal Singh & Ors1., State of Jharkhand & Ors. v. Jitendra Kumar Srivastava2 and the Division Bench judgments of this Court in Ram Murti Pandey v. State of U.P. & Ors.3, Mohan Ram v. State of U.P. & Ors.4 and State of U.P. & Ors. v. Jai Prakash5 as also the judgment of learned Single Judge in Ramsiya Yadav v. State of U.P & Ors.6.

It is contended that Apex Court as also the Division Benches of this Court have held that pension and gratuity are no-longer bounty rather they are valuable rights of an employee on his retirement. In absence of any provision for withholding the pension or gratuity, it is not permitted to the State Authorities to do so. The Division Bench in Ram Murti Pandey (supra) placing reliance upon the pronouncements of the Apex Court in the case of State of Jharkhand (supra) and consideration of Regulations 351 and 351-A of Civil Service Regulations, has held that there is no provision in the Rules for withholding of the pension during the pendency of the criminal proceedings or even during the pendency of disciplinary proceedings. Thus, in view of the law laid down by the Apex Court in the State of Jharkhand (supra), the pension of the petitioner cannot be withheld during the pendency of the criminal proceedings. The interest on delayed payment of retiral dues was awarded for wrongful withholding of pension for a long period. Similar view has been taken by another Division Bench in Special Appeal Defective No.408 of 2016 (State Of U.P. And 2 Ors. v. Dhirendra Pal Singh, Restired Asstt. Store Superintendent ) decided on 31.5.2016.

Learned Standing Counsel, on the other hand, placing reliance upon the law laid down by the Division Benches in a State of U.P. v. Jai Prakash (supra) and Mohan Ram (supra) submitted that during pendency of the judicial and departmental proceedings, the employee concerned is only entitled for provisional pension and not full pension or gratuity. Reference has been to provisions of Regulation 351-AA read 919-A of the Civil Service Regulations to defend the stand taken by the respondents.

Heard learned counsel for the parties and perused the record. The question as to whether the State Government can withhold the pension of an employee during the pendency of the criminal or departmental proceedings has gained attention of this Court from time to time. There are conflicting judgments of Division Benches of this Court on the issue. The legal position, however, has been clarified by two Division Benches in State of U.P. & Ors. V. Jai Prakash (supra) and in Special Appeal Defective No.416 of 2014 (State Of U.P. And 3 Ors. v. Faini Singh) decided on 25.4.2014. Having considered the provisions of Regulations 351, 351-A, 351-AA and 919-A of the Civil Service Regulations, both the Division Benches reached at a consensus that the State Government has power to withhold the payment of gratuity until conclusion of the criminal trial in accordance with the provisions of Regulation 351-AA read with Regulation 919-A (3) of the Civil Service Regulations. However, the Division Bench in the case of Faini Singh (supra) has opined that the power vested in the State Authority cannot be used mechanically. Merely, on the pendency of any judicial proceedings against the retired Government Servant, without considering the allegations against him, the Government or the Competent Authority would not be empowered to withhold gratuity and full pension. The said principle has been drawn on the accepted legal position that the power vested in an Authority has to be utilized bonafidely for the purposes for which such power is given.

The relevant observations of the Division Benches in State of U.P. v. Jai Prakash and State of U.P & 3 Ors. v. Faini Singh (supra) are quoted as under:-

The Division Bench of this Court in the case of State of U.P. Vs. Jai Prakash (supra) has taken the following view.

"7. The learned Single Judge, in the present case, has proceeded on the basis that neither in regulation 351 nor in regulation 351-A is a withholding of gratuity contemplated during the pendency of a judicial proceeding. The learned Single Judge, with respect, has overlooked the provisions of regulation 351-AA and a specific bar which is contained in regulation 919-A (3). In view of the specific prohibition which is contained in regulation 919-A (3), no death-cum-retirement gratuity would be admissible until the conclusion of a departmental or judicial proceeding. The expression 'judicial proceeding' would necessarily include the pendency of a criminal case.

8. In a judgement of a Division Bench of this Court in Shri Pal Vaish vs. U.P. Power Corporation Limited and another1, it has been held that clause 3 of regulation 919-A is a provision which specifically deals with the payment of gratuity during pendency of departmental or judicial proceedings and in view thereof, the payment of gratuity has to be deferred until the conclusion of such a proceeding. The Division Bench also held that the payment of gratuity cannot be made in view of the bar contained in regulation 919-A during the pendency of a criminal case.

9. In a recent judgement of the Supreme Court in State of Jharkhand & Ors. v. Jitendra Kumar Srivastava & Anr., the Supreme Court dealt with the provisions of Rule 43 (b) of the Pension Rules of the State of Bihar as applicable to the State of Jharkhand. Regulation 43(b) was pari materia to regulation 351-A of the Civil Service Regulations in the State of U.P. In that context, the Supreme Court held that Rule 43(b) made it clear that it was permissible for the Government to withhold pension only when a finding is recorded in a departmental inquiry or judicial proceeding in regard to the commission of misconduct while in service and rule 43(b) contains no provision for withholding gratuity when departmental or judicial proceedings are still pending. However, the Supreme Court clarified that though there was no provision for withholding pension or gratuity in the given situation, had there been any such provision in the rules, the position would have been different. In the present case, there is a specific provision contained in regulation 351-AA read with regulation 919-A(3).

10. In the circumstances, we are of the view that the order passed by the Superintendent of Police, Etah withholding the payment of gratuity until the conclusion of the criminal trial was correct and proper and was in accordance with the provisions of regulation 351-AA read with regulation 919-A (3). The respondent would however be entitled to the payment of provisional pension as contemplated in law. In view of the above, we allow the appeal and set aside the impugned order of the learned Single Judge dated 10 May 2013. In consequence, the petition which has been filed under Article 226 of the Constitution shall stand dismissed. There shall be no order as to costs".

The said Division Bench judgement Jai Prakash (supra) has been considered in Special Appeal Defective No. 416 of 2014 (State of U.P. And 3 others Vs. Faini Singh) as follows:-

"10. The discussion in State of U.P. v. Jai Prakash (supra) opens up another question to be considered namely whether the power under Section 351-AA read with regulation 919A can be used mechanically on the pendency of any judicial proceedings against the government servant, without considering the allegations against the retired government servant, and would empower the competent authority to withhold gratuity, and full pension.

11. Every power vested in authority has to be utilised bonafidely for the purposes for which such power is given. The discretion given should not consume the power for which such discretion is to be exercised.

12. In the present case, Faini Singh-the petitioner/respondent serving as Sub Inspector retired on 31.12.2006 from District Bijnor, Uttar Pradesh. A first information report was lodged on 14.2.1994 under Sections 419, 420, 467, 468 IPC, P.S. Dalanwala, District Dehradun against the petitioner in which it was alleged that the first accused along with 10 accused persons including the respondent committed a fraud in taking a loan by Shriram son of Hari Ram from U.P. Financial Corporation. The Criminal Investigation Department carried out investigation and found that the loan was taken by furnishing false documents and of which one Shri Hukum Singh as well as Faini Singh-the petitioner were the guarantors. During investigation it was found that some amount was given to Faini Singh by issuing cheques by Shriram-the borrower. The total amount of the loan involved was Rs.20,000/-.

13. It is stated that a charge sheet was submitted in which the trial is still pending even after twenty years after the registration of the crime and eight years after the superannuation of the petitioner-respondent.

14. We are of the opinion that the existence of the power by itself does not justify the exercise of powers. The petitioner retired eight years' ago. The crime, in which the petitioner is an accused, is based on allegation of fraud committed by Shriram. Shri Hukum Singh and Shri Faini Singh-the petitioner were guarantors to the loan. In the writ petition it is stated that the entire loan amount was repaid as soon as the notice was received by Shri Faini Singh and that no loss was caused to the UP Financial Corporation.

15. In this case we find that the order of Superintendent of Police, Bijnor dated 26.11.2013 passed in pursuance to the directions issued by this Court on 10.9.2013 in Writ Petition No.47500 of 2013 did not take into consideration the allegation made against the petitioner in the first information report. The order was passed withholding of gratuity and commutation of pension under Para 351 and 351A of Civil Service Regulation only on the ground that the Criminal Case No.35 of 1994 under Sections 419, 420, 467, 468, 471, 120B IPC, P.S. Dalanwana, District Dehradun, Criminal Case No.24/1994 is pending against him in the Court of Chief Judicial Magistrate, District Dehradun. The order also refers to the payment made to the petitioner regarding leave encashment, GFP, insurance amount and provisional pension.

16. We also find that Regulations 351 and 351A of Civil Service Regulation provide guidelines for exercise of powers to withhold the retiral dues. Regulation 351 provides that if the pensioner is convicted of a serious crime or being guilty of a grave misconduct the State Government reserves the right of withholding or withdrawing a pension or any part of it. Regulation 351A is thus attracted where a person is convicted. Regulation 351A is applicable where the pensioner is found in departmental or judicial proceedings to have been guilty of grave misconduct or to have caused pecuniary loss to the government by misconduct or negligence during his service including the services rendered on reemployment after retirement. Regulation 351A is thus applicable in a case where a person is found in a departmental or judicial proceedings to be guilty of grave misconduct or to have caused pecuniary loss to the government. Regulation 919A authorises grant of provisional pension in the cases referred in Regulation 351AA. A combined reading of these regulations would go to show that the powers of withholding or withdrawing pension to be used in the cases where there are no allegations of serious crime or grave misconduct or any pecuniary loss caused to the government by misconduct or negligence during his service including services rendered on reemployment after retirement.

17. The object of these powers clearly demonstrates that these powers have to be exercised with circumspection and caution and have to be utilised for the purposes for which they have been vested in the State Government. Such powers cannot be used mechanically on the pendency of any judicial proceedings. The delay in judicial proceeding is also required to be taken into consideration and counted for the purposes of exercise of such powers.

18. The allegations against the petitioner relate to a loan taken by one Shriram of which he was the guarantor. The evidence was collected by the CID regarding giving of some amount by Shriram to the petitioner from his bank account. There are no allegation in the first information report which may attribute any act of deception or fraud on the part of Faini Singh. Even if he was beneficiary of the loan, which was taken by playing fraud, he had deposited the entire amount as the guarantor when he received a show cause notice. These circumstances were neither examined nor considered by the competent authority while exercising powers under Regulation 351AA read with Regulation 919A in withholding the gratuity and in withholding pension to be paid to him.

19. Ordinarily we would have sent the matter back to the competent authority to decide whether the allegations made against the petitioner were sufficient to withhold the full retiral benefits to the petitioner. We, however, find that the criminal case is pending for last 20 years and even after eight years of petitioner's retirement and in which the allegations are not such which are directly attributable to the respondent for having played fraud for getting the loan. In any case these allegations have not been proved and the entire amount of loan has been deposited in the UP Financial Corporation.

20. In our opinion the continuance of the embargo on payment of gratuity and full pension amounts to injustice to the petitioner, who was not accused of causing any loss to the State Government. The allegations were not levelled against the petitioner with regard to discharge of his statutory duty. In the circumstances withholding the gratuty and full pension is not justified at all.

21. We may point out that a mere pendency of any judicial proceeding cannot be a ground to exercise the powers under Article 351AA read with Regulation 919A for withholding the retiral dues. The nature of allegations and the gravity of charge has to be taken into consideration by the competent authority before making an order to withhold the retiral dues. In case the pendency of any judicial proceeding is held to be sufficient, a minor offence or even a parking ticket may be a ground to withhold the pension of a retired employee. Such a situation is not contemplated under the powers conferred on the competent authority under the Civil Services Regulations.

22. For the aforesaid reasons the Special Appeal is dismissed. "

The above view has also been followed by another Division Bench in Mohan Ram (supra) wherein considering the allegations against the Government servant in the pending criminal proceedings, it was held that since the charges are in reference of wrongful discharge of official duty, the decision of the Competent Authority to withhold full pension as affirmed by the learned Single Judge required no interference.

Similar view has been taken by me in Ram Siya Yadav (supra).

Reiterating the view taken by me in Ram Siya Yadav (supra), the legal position as culled out from the statutory provisions is being noted hereunder. For ready reference, the relevant provisions of the Civil Service Regulations are reproduced hereunder:-

"Regulation 351 is as follows:-

351. Future good conduct is an implied condition of every grant of a pension. The State Government reserve to themselves the right of withholding or withdrawing a pension or any part of it, if the pensioner be convicted of serious crime or be guilty of grave misconduct.

The decision of the State Government on any question of withholding or withdrawing the whole or any part of pension under this regulation shall be final and conclusive."

Regulation 351-A insofar as is material to this proceeding is as follows:

" 351-A. The Governor reserves to himself the right of withholding or withdrawing a pension or any part of it, whether permanently or for a specified period and the right of ordering the recovery from a pension of the whole or part of any pecuniary loss caused Government, if the pensioner is found in departmental or Judicial proceedings to have been guilty of grave misconduct, or to have caused pecuniary loss to Government by misconduct or negligence, during his service, including service rendered on re-employment after retirement.

Provided that:

(a) such departmental proceedings, if not instituted while the officer was on duty either before retirement or during re-employment.

(i) shall not be instituted with the save with the sanction of Governor.

(ii) shall be in respect of event which took place not more than four years before the institution of proceedings and

(iii) shall be conducted by such authority and in such place or places as the Governor may direct and in accordance with the procedure applicable on which an order of dismissal from service may be made

Explanation (b) to the second proviso of Regulation 351-A, inter alia, provides as follows:

(a) departmental proceedings shall be deemed to have been instituted when the charges framed against the pensioner are issued to him, or, if the officer has been placed under suspension from an earlier date, on such date.

(b) judicial proceedings shall be deemed to have been instituted:

(i)in the case of criminal proceedings, on the date on which complaint is made, or a charge-sheet is submitted, to a criminal court ; and

(ii)in the case of civil proceedings, on the date on which the plaint is presented or, as the case may be, an application is made to a civil court."

Regulation 351-AA is as follows:

" 351-AA. In the case of a Government Servant who retires on attaining the age of superannuation or otherwise and against whom any departmental or Judicial proceedings or any enquiry by Administrative Tribunal is pending on the date of retirement or is to be instituted after retirement a provisional pension as provided in Regulation 919-A may be sanctioned."

Regulation 919-A reads as follows:

" 919-A. (1) In case referred to in Regulation 351-AA the Head of Department may authorise the provisional pension equal to the maximum pension which would have been admissible on the basis of qualifying service upto the date of retirement of the Government servant or if he was under suspension on the date of retirement upto the date immediately preceding the date on which he was placed under suspension.

(2) The provisional pension shall be authorised for the period commencing from the date of retirement upto and including the date on which after conclusion of departmental or judicial proceeding or the enquiry by the administrative Tribunal; as the case may be, final orders are passed by the competent authority.

(3) No death-cum-retirement gratuity shall be paid to the Government servant until the conclusion of the departmental or judicial proceedings or the enquiry by the Administrative Tribunal and issue of final orders thereon.

(4)Payment of provisional pension made under clause (1) above shall be adjusted against final retirement benefits sanctioned to such Government servant upon conclusion of the proceedings or enquiry referred to in clause (3) but no recovery shall be made where the pension finally sanctioned is less than the provisional pension or withheld either permanently or for special period."

A careful reading of the abovenoted provisions indicates that the Regulation 351 of the Civil Service Regulations operates in a situation where a retired Government servant is found guilty of gross misconduct or to have caused pecuniary loss to the Government by his misconduct or negligence i.e. in a case of proved gross misconduct in a departmental or judicial proceeding. Thus, Regulation 351-A of the Civil Service Regulations postulates that there has to be a determination in departmental or judicial proceedings. Whereas Regulation 351-AA operates in a different situation i.e. in a case of pendency of departmental or judicial proceedings or any enquiry by the Administrative Tribunal, on the date of retirement or instituted after retirement. Regulation 919-A further provides for computation of provisional pension payable under Regulation 351-AA and adjustment thereof on culmination of departmental/judicial proceedings. Regulation 919-A(3), however, contains an expression of prohibition of payment of death-cum-retirement gratuity to a Government servant until the conclusion of the departmental or judicial proceeding or an enquiry made by the Administrative Tribunal. Regulation 41 of the Civil Service Regulations provides that except when the term "pension" is used in any contradiction of gratuity, "Pension" would include gratuity. Thus, from a combined reading of the aforesaid provisions, there cannot be a doubt that the power of withholding pension or gratuity until the conclusion of departmental/judicial proceeding flows from the statutory rules and such power can be exercised in the facts and circumstances of a given case.

Only exception drawn by the Division Bench in Faini Singh (supra) is that there shall not be a mechanical exercise of power by the Competent Authority with whom such power is vested, inasmuch as, the power to withhold pension and gratuity has to be exercised with circumspection and caution and has to be utilized for the purpose for which it has been vested in the State Government. The Division Bench has also taken note of the delay in judicial proceedings to hold that there shall not be mechanical use of power for withholding pension or gratuity on the pendency of any judicial proceedings.

As far as the pronouncements of Apex Court in State of Jharkhand and Ors. (supra) is concerned, it is noteworthy that the said pronouncement came in the light of the provisions of the Pension Rules of the State of Bihar as applicable to the State of Jharkhand. In the context of Rule 43-b of the relevant Pension Rules, the Supreme Court held that since it does not contain any provision for withholding gratuity when departmental or judicial proceedings are still pending, on the basis of a Circular which is not having force of law, the State Authorities cannot withhold even a part of pension or gratuity. However, the Apex Court in the end has clarified that had there been any such provision in the statutory rules, the position would have been different. In the State of U.P., position is different inasmuch as there is specific provision contained in Regulations 351-AA read with Regulation 919-A (3) of the Civil Service Regulations and, therefore, the law laid down by the Apex Court in State of Jharkhand (supra) would be of no help.

The Division Bench in Ram Murti Pandey (supra) while placing reliance upon the said pronouncement in the State of Jharkhand (supra) has not taken note of Regulation 351-AA read with Regulation 919-A (3) of the Civil Service Regulations. The previous judgments of Division Benches in State of U.P. & Ors. v. Jai Prakash (supra), Mohan Ram (supra) have also not been placed before the Division Bench in Ram Murti Pandey (supra), as they have not been noted in the said pronouncement.

The law laid down by the Division Bench in Ram Murti Pandey (supra) placing reliance upon the judgment of Apex Court in State of Jharkhand (supra), in holding that the statutory rules do not provide power to withhold pension or gratuity is, thus, per incurium being in ignorance of the statutory provisions and the previous judgments of the Division Benches of this Court.

The reliance placed by the learned counsel for the petitioner on the said pronouncement, therefore, would be of no benefit.

Thus, the legal position in the matter of withholding of pension or gratuity on pendency of judicial proceeding is summarised as follows:-

1) Regulation 351-AA read with Regulation 919-(3) of the Civil Service Regulations authorizes the State Government/Competent Authority to withhold payment of full pension or gratuity until the conclusion of the departmental/judicial proceedings or as the case may be and payment of provisional pension uptil conclusion of the said proceedings.

2) However, such power has to be exercised with circumspection so as to achieve the purpose of the legal provision and shall not be used mechanically on mere pendency of the judicial proceedings.

3) The nature of allegation against the Government servant in a judicial proceeding has to be seen in the facts of the case, inasmuch as, the delay in judicial proceedings is also one of the circumstance which is required to be taken into consideration and counted for the purpose of exercise of such power.

4) The view taken by the Division Bench in Faini Singh (supra) is relevant in a case of withholding of pension or gratuity during the pendency of judicial proceedings and not to be applied in a case of pendency of departmental proceedings. The reason being that in such proceedings, the charges are of dereliction of duty and on culmination of the departmental proceedings, on the proved misconduct, the Departmental Authority may come to the conclusion that the delinquent employee is not entitled for pension or gratuity, the benefits which an employee earns by dint of his long, continuous, faithful and unblemished service. On the other hand, the allegations in the criminal cases may be of varied nature i.e. of less serious crime. And moreover, the delay in judicial proceedings is also to be taken note of to reach at a conclusion as to whether the order of withholding of pension or gratuity is justifiable or not in a given case.

In view of the above legal position, only question remains to be considered is whether in the instant case, the decision of the Competent Authority to withhold full pension can be sustained.

The present is the case where two criminal cases have been lodged on the allegations of corruption in discharge of official duties. The said charges are being investigated by the Crime Branch of the U.P. Police. The fact of pendency of investigation in the Case Crime No.157 of 2015 under Section 13(1)(e) and 13(2) under the Prevention of Corruption Act, 1988 as noted in the communication dated 15.7.2016 is not disputed by learned counsel for the petitioner during the course of argument. In another Criminal Case under Sections 216, 120-B IPC, the petitioner has been charge-sheeted and the trial is pending.

Looking to the nature of charges under Sections 216 and 120-B IPC as also under the Provisions of Prevention of Corruption Act, 1988, this Court is of the view that the allegations against the petitioner are of serious offence relating to lapses in due discharge of official duties. Consequently, in the facts and circumstances of the case, this Court does not find any illegality or perversity in the decision of the Competent Authority to withhold full pension and other retiral dues during pendency of the judicial proceedings. Provisional pension has been accorded to the petitioner. No case for issuance of mandamus is made out.

The writ petition is found devoid of merits and hence dismissed.

(Sunita Agarwal, J.)

Order Date :- 04.09.2018

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