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REPORTABLE    

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 6770 OF 2013 (Arising out of Special Leave Petition (Civil) No. 1427 of 2009)

State of Jharkhand  & Ors. ….. Appellant(s)

Vs.

Jitendra Kumar Srivastava & Anr.               …..Respondent(s)

WITH C.A. No. 6771/2013 (arising out of SLP(C) No. 1428 of 2009)

J U D G M E N T A.K. Sikri, J 1. Leave granted.

2. Crisp and short question which arises for consideration in these cases  

is as to whether, in the absence of any provision in the Pension Rules, the  

State Government can withhold a part of pension and/or gratuity during the  

pendency of departmental/ criminal proceedings?  The High Court has -

answered this question, vide the impugned judgment, in the negative and  

hence directed the appellant to release the withheld dues to the respondent.  

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Not  happy  with  this  outcome,  the  State  of  Jharkhand  has  preferred  this  

appeal.

3. For the sake of convenience we will gather the facts from Civil Appeal  

arising out of SLP(Civil) No. 1427 of 2009.  Only facts which need to be  

noted, giving rise to the aforesaid questions of law, are the following:

The respondent was working in the Department of Animal Husbandry  

and Fisheries. He joined the said Department in the Government of Bihar on  

2.11.1966.  On  16.4.1996,  two  cases  were  registered  against  him  under  

various  Sections  of  the  Indian  Penal  Code  as  well  as  Prevention  of  

Corruption  Act,  alleging  serious  financial  irregularities  during  the  years  

1990-1991,  1991-1992  when  he  was  posted  as  Artificial  Insemination  

Officer,  Ranchi.  On promulgation of  the Bihar Reorganisation Act, 2000,  

State  of  Jharkhand  (Appellant  herein)  came  into  existence  and  the  

Respondent  became the  employee  of  the  appellant  State.  Prosecution,  in  

respect of the aforesaid two criminal cases against the respondent is pending.  

On 30th January, 2002, the appellant also ordered initiation of disciplinary  

action against him. While these proceedings were still pending, on attaining  

-

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the age of superannuation, the respondent retired from the post of Artificial  

Insemination Officer, Ranchi on 31.08.2002. The appellant sanctioned the  

release and payment of General Provident Fund on 25.5.2003. Thereafter, on  

18.3.2004, the Appellant sanctioned 90 percent provisional pension to the  

respondent.  Remaining  10  percent  pension  and  salary  of  his  suspension  

period  (30.1.2002  to  30.8.2002)  was  withheld  pending  outcome  of  the  

criminal cases/ departmental inquiry against him. He was also not paid leave  

encashment and gratuity.

4. Feeling aggrieved with this action of the withholding of his 10 percent  

of the pension and non-release of the other aforesaid dues, the respondent  

preferred the Writ Petition before the High Court of Jharkhand.  This Writ  

Petition was disposed of by the High Court by remitting the case back to the  

Department to decide the claim of the petitioner for payment of provisional  

pension, gratuity etc. in terms of Resolution No. 3014 dated 31.7.1980.  The  

appellant,  thereafter,  considered  the  representation  of  the  respondent  but  

rejected the same vide orders dated 16.3.2006. The respondent challenged  

the rejection by filing another Writ Petition before the High Court. The said  

petition was dismissed by the learned Single Judge.  The respondent filed  

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Intra Court Appeal which has been allowed by the Division Bench vide the  

-

impugned orders dated 31.10.2007. The Division Bench has held that the  

question is squarely covered by the full Bench decision of that Court in the  

case of  Dr. Dudh Nath Pandey vs.  State of Jharkhand and Ors. 2007 (4)  

JCR 1.  In the said full  Bench Judgment dated 28.8.2007,  after  detailed  

discussions  on the various nuances of the subject matter, the High Court has  

held:

“ To sum up the answer for the two questions are as follows:

(i) Under Rule 43(a) and 43(b) of Bihar Pension Rules, there  is no power for the Government to withhold Gratuity and  Pension  during  the  pendency  of  the  departmental  proceeding or criminal proceeding. It does not give any  power to withhold Leave Encashment at any stage either  prior  to  the  proceeding  or  after  conclusion  of  the  Proceeding.

(ii) The circular, issued by the Finance Department, referring  to  the withholding of  the leave encashment  would not  apply to the present facts of the case as it has no sanctity  of law”.        

5. Mr. Amarendra Sharan, the learned Senior Counsel appearing for the  

petitioner accepted the fact that in so far as the Pension Rules are concerned,  

there  is  no  provision  for  withholding  a  part  of  pension  or  gratuity.  He,  

however, submitted that there are administrative instructions which permit  

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withholding of a part of pension and gratuity. His submission was that when  

the rules are silent on a particular aspect, gap can be filled by the -

administrative instructions which was well settled legal position,  laid down  

way back in the year 1968 by the Constitution Bench Judgment of this Court  

in Sant Ram Sharma vs. Union of India 1968 (1) SCR 111. He,  thus, argued  

that the High Court has committed an error in holding that there was no  

power  with  the  Government  to  withhold  the  part  of  pension or  gratuity,  

pending disciplinary/criminal proceedings.

6. The aforesaid arguments of the learned Senior Counsel based on the  

judgment in  Sant Ram Sharma would not cut any ice in so far as present  

case is concerned, because of the reason this case has no applicability in the  

given case.   Sant  Ram judgment governs  the  field of  administrative  law  

wherein the Constitution Bench laid down the principle that the rules framed  

by the authority in exercise of powers contained in an enactment, would also  

have  statutory  force.  Though  the  administration  can  issue  administrative  

instructions  for  the  smooth  administrative  function,  such  administrative  

instructions  cannot  supplant  the  rules.  However,  these  administrative  

instructions  can  supplement  the  statutory  rules  by  taking  care  of  those  

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situations where the statutory rules are silent.  This ratio of that judgment is  

narrated in the following  manner:  

“It is true that there is no specific provision in the Rules laying  down the principle of promotion of junior or senior grade - officers to selection grade posts.  But that does not mean that  till  statutory rules  are  framed in  this  behalf  the  Government  cannot issue administrative instructions regarding the principle  to  be  followed  in  promotions  of  the  officers  concerned  to  selection grade posts.  It is true that Government cannot amend  or supersede statutory rules by administrative instructions, but  if the rules are silent on any particular point Government can  fill up the gaps and supplement the rules and issue instructions  and inconsistent with the rules already framed”.

     There cannot be any quarrel on this exposition of law which is well  

grounded in a series of judgments pronounced post Sant Ram Sharma case  

as  well.   However,  the  question  which  is  posed  in  the  present  case  is  

altogether different.

7. It  is  an  accepted  position  that  gratuity  and  pension  are  not  the  

bounties.  An employee earns these benefits by dint of his long, continuous,  

faithful and un-blemished service.  Conceptually it is so lucidly described in  

D.S. Nakara and Ors. Vs. Union of India; (1983) 1 SCC 305 by Justice D.A.  

Desai,  who spoke for the Bench, in his inimitable style, in the following  

words:

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“The approach of the respondents raises a vital and none too  easy of answer, question as to why pension is paid.  And why  was  it  required  to  be  liberalised?   Is  the  employer,  which  expression will include even the State, bound to pay pension?  Is  there  any  obligation  on  the  employer  to  provide  for  the  erstwhile employee even after the contract of employment has  come to an end and the employee has ceased to render service? - What  is  a  pension?   What  are  the  goals  of  pension?   What  public interest or purpose, if any, it seeks to serve?  If it does  seek  to  serve  some  public  purpose,  is  it  thwarted  by  such  artificial division of retirement pre and post a certain date?  We  need  seek  answer  to  these  and incidental  questions  so  as  to  render just justice between parties to this petition. The antiquated notion of pension being a bounty a gratituous  payment  depending  upon  the  sweet  will  or  grace  of  the  employer not  claimable as  a right  and,  therefore,  no right  to  pension can be enforced through Court has been swept under  the carpet by the decision of the Constitution Bench in Deoki  Nandan Prasad v. State of Bihar and Ors.[1971] Su. S.C.R. 634  wherein this Court authoritatively ruled that pension is a right  and the payment of it does not depend upon the discretion of  the Government but is governed by the rules and a Government  servant coming within those rules is entitled to claim pension.  It was  further held that the grant of pension does not depend  upon  any  one’s  discretion.   It  is  only  for  the  purpose  of  quantifying the amount having regard to service and other allied  maters  that  it  may be  necessary for  the authority  to  pass  an  order to that effect but the right to receive pension flows to the  officer not because of any  such order but by virtue of the rules.  This view was reaffirmed in State of Punjab and Anr. V. Iqbal  Singh  (1976)  IILLJ 377SC”.

8. It is thus hard earned benefit which accrues to an employee and is in  

the  nature  of  “property”.   This  right  to  property  cannot  be  taken  away  

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without the due process of law as per the provisions of Article 300 A of the  

Constitution of India.

9. Having  explained  the  legal  position,  let  us  first  discuss  the  rules  

relating to release of Pension.  The present case is admittedly governed by -

Bihar Pension Rules, as applicable to the State of Jharkhand. Rule 43(b) of  

the said Pension Rules confers power on the State Government to withhold  

or withdraw a pension or part  thereof under certain circumstances.   This  

Rule 43(b) reads as under:

“43(b) The State Government further reserve to themselves the  right of withholding or withdrawing a pension or any part of it,  whether permanently or for specified period, and the right of  ordering the recovery from a pension of the whole or part of  any pecuniary loss caused to Government if  the pensioner is  found  in  departmental  or  judicial  proceeding  to  have  been  guilty to grave misconduct, or to have caused pecuniary loss to  Government misconduct,  or to have caused pecuniary loss to  Government by misconduct  or  negligence,  during his  service  including service rendered on re-employment after retirement”.  

From  the  reading  of  the  aforesaid  Rule  43(b),  following  position emerges:-

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

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

(iii) The  power  of  withholding  leave  encashment  is  not  provided under this rule to the State irrespective of the  result of the above proceedings.

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

10. There is also a Proviso  to Rule 43(b), which provides that:-

“A. Such  departmental  proceedings,  if  not  instituted  while  the  Government  Servant was on duty either before retirement or during  re-employment.

i. Shall not be instituted save with the sanction  of the State Government.

ii Shall be in respect of an event which took  place  not  more  than four  years  before  the  institution of such proceedings.

iii Shall be conducted by such authority and at  such  place  or  places  as  the  State  Government  may direct  and in  accordance  with the procedure applicable to proceedings  on which an order of dismissal from service  may be made:-

B. Judicial  proceedings,  if  not  instituted  while  the  Government Servant was on duty either before retirement  or  during  re-employment  shall  have  been  instated  in  accordance with sub clause (ii) of clause (a) and

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C. The  Bihar  Public  Service  Commission,  shall  be  consulted before final orders are passed.

It  is  apparent  that  the  proviso  speaks  about  the  institution  of  

proceedings.  For initiating proceedings,  Rule 43(b) puts some conditions,  

i.e, Department proceeding as indicated in Rule 43(b),  if not instituted while  

the Government Servant was on duty,  then it shall not be instituted except:-  

(a) With the sanction of the Government, - (b) It shall be in respect of an event which took place  

not more than four years before the institution of  the proceedings.

(c) Such  proceedings  shall  be  conducted  by  the  enquiry officer in accordance with the proceedings  by which dismissal of the services can be made.

Thus, in so far as the proviso is concerned that deals with condition  

for initiation of proceedings and the period of limitation within which such  

proceedings can be initiated.   

11. Reading of Rule 43(b) makes it abundantly clear that even after the  

conclusion of the departmental inquiry, it is permissible for the Government  

to  withhold  pension  etc.  ONLY when  a  finding  is  recorded  either  in  

departmental  inquiry  or  judicial  proceedings  that  the  employee  had  

committed grave misconduct in the discharge of his duty while in his office.  

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There is no provision in the rules for withholding of the pension/ gratuity  

when  such  departmental  proceedings  or  judicial  proceedings  are  still  

pending.   

12. Right to receive pension was recognized as right to property by the  

Constitution Bench Judgment of this Court in Deokinandan Prasad vs. State   

of Bihar; (1971) 2 SCC 330, as is apparent from the following discussion:

“29. The last  question to  be  considered,  is,  whether  the right  to  receive pension by a Government servant is property, so as to attract  Articles 19(1)(f) and 31(1) of the Constitution. This question falls to  be  decided  in  order  to  consider  whether  the  writ  petition  is  maintainable  under  Article 32.  To  this  aspect,  we  have  already  adverted to earlier and we now proceed to consider the same.

30. According  to  the  petitioner  the  right  to  receive  pension  is  property and the respondents by an executive order dated June 12,  1968 have wrongfully withheld his pension. That order affects his  fundamental  rights  under  Articles 19(1)(f) and 31(1) of  the  Constitution. The respondents, as we have already indicated, do not  dispute the right of the petitioner to get pension, but for the order  passed  on August  5,  1966.  There  is  only  a  bald  averment  in  the  counter-affidavit that no question of any fundamental right arises for  consideration. Mr. Jha, learned counsel for the respondents, was not  prepared to  take up the position that  the  right  to  receive pension  cannot  be  considered  to  be  property  under  any  circumstances.  According to him, in this case, no order has been passed by the State  granting pension. We understood the learned counsel to urge that if  the State had passed an order granting pension and later on resiles  from that  order,  the  latter  order  may  be  considered  to  affect  the  

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33. The matter again came up before a Full Bench of the Punjab  and Haryana High Court in K.R. Erry v. The State of Punjab I.L.R.  1967 P & H 278. The High Court had to consider the nature of the  right of an officer to get pension. The majority quoted with approval  the principles  laid down in the  two earlier  decisions of  the same  High Court, referred to above, and held that the pension is not to be  treated as a bounty payable on the sweet will  and pleasure of the  Government and that the right to superannuation pension including  its amount is a valuable right vesting in a Government servant It was  further  held by the majority that  even though an opportunity had  already  been  afforded  to  the  officer  on  an  earlier  occasion  for  showing  cause  against  the  imposition  of  penalty  for  lapse  or  misconduct on his part and he has been found guilty, nevertheless,  when  a  cut  is  sought  to  be  imposed  in  the  quantum  of  pension  payable  to  an  officer  on  the  basis  of  misconduct  already  proved  against him, a further opportunity to show cause in that regard must  be given to the officer.  This view regarding the giving of  further  opportunity was expressed by the learned Judges on the basis of the  relevant Punjab Civil Service Rules. But the learned Chief Justice in  his dissenting judgment was not prepared to agree with the majority  that under such circumstances a further opportunity should be given  to an officer when a reduction in the amount of pension payable is  made by the State. It is not necessary for us in the case on hand, to  consider  the  question  whether  before  taking  action  by  way  of  reducing or denying the pension on the basis of disciplinary action  already taken, a further notice to show cause should be given to an  officer. That question does not arise for consideration before us. Nor  are we concerned with the further question regarding the procedure,  if  any,  to  be  adopted  by  the  authorities  before  reducing  or  withholding the pension for the first time after the retirement of an  officer. Hence we express no opinion regarding the views expressed  by the majority and the minority Judges in the above Punjab High  

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was no longer remained a fundamental right,  it  was still  a Constitutional  

right,  as  provided  in  Article  300A of  the  Constitution.  Right  to  receive  

pension was treated as right to property. Otherwise, challenge in that case  

was to the vires of Rule 10(1) of the West Bengal Services (Death-cum--

Retirement  Benefit)  Rules,  1971  which  conferred  the  right  upon  the  

Governor  to  withhold  or  withdraw a  pension  or  any  part  thereof  under  

certain circumstances and the said challenge was repelled by this Court.    

Fact remains that there is an imprimatur to the legal principle that the  

right to receive pension is recognized as a right in “property”.  

14. Article 300 A of the Constitution of India reads as under:

“300A Persons not to be deprived of property save by  authority of law. -  No person shall be deprived of his property  save by authority of law.”

Once we proceed on that premise, the answer to the question posed by  

us in the beginning of this judgment becomes too obvious. A person cannot  

be  deprived  of  this  pension  without  the  authority  of  law,  which  is  the  

Constitutional  mandate  enshrined in Article 300 A of the Constitution.  It  

follows  that  attempt  of  the  appellant  to  take  away  a  part  of  pension  or  

gratuity or even leave encashment without any statutory provision and under  

the umbrage of administrative instruction cannot be countenanced.

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15. It hardly needs to be emphasized that the executive instructions are  

not  having statutory character  and,  therefore,  cannot  be termed as  “law”  

within  the  meaning  of  aforesaid  Article  300A.   On  the  basis  of  such  a  

circular, which is not having force of law, the appellant cannot withhold -

even a part of pension or gratuity.    As we noticed above, so far as statutory  

rules are concerned, there is no provision for withholding pension or gratuity  

in the given situation.  Had there been any such provision in these rules, the  

position would have been different.

16.  We, accordingly, find that there is no merit in the instant appeals as  

the impugned order of the High Court is without blemish. Accordingly, these  

appeals are dismissed with costs quantified at Rs. 10,000/- each.

……………………….J. [K.S. Radhakrishnan]

………………………….J. [A.K. Sikri]

New Delhi August 14, 2013

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