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2009 DIGILAW 2835 (ALL)

SHRI PAL VAISH v. U. P. POWER CORPORATION LIMITED

2009-08-13

ABHINAVA UPADHYA, JANARDAN SAHAI

body2009
JUDGMENT By the Court.—The petitioner was an Assistant Engineer in the U.P. Power Corporation. It appears that a criminal case under Section 13(1) of the Prevention of Corruption Act and for certain other offences is pending against him. The petitioner retired on 30.6.2000. He is aggrieved by the order dated 23rd September, 2000 of the U.P. Power Corporation by which the gratuity of the petitioner has been withheld pending vigilance proceedings which appear to have preceded the criminal case. However the petitioner has been permitted provisional pension. A portion of this order by which gratuity has been withheld has been challenged by the petitioner. 2. We have heard Sri Ranjit Saxena counsel for the petitioner and Sri Anil Mehrotra counsel for the U.P. Power Corporation. It is stated by Sri Anil Mehrotra learned Standing Counsel for the Corporation that the Civil Service Regulations dealing with the subject pension and gratuity have been adopted by the Corporation and the arguments were heard on the foundation that the Civil Service Regulations were applicable. It is also stated by Sri Anil Mehrotra that the U.P. Retirement Benefit Rules, 1961 as well as the U.P. Liberalised Pension Rules, 1961 are applicable and have been adopted by the Corporation. 3. Sri Ranjit Saxena, counsel for the petitioner submitted that the State Government does not have any power to withhold pension under Regulation 351-A of the Civil Service Regulations. According to him gratuity and pension are conceptually different and pension alone can be withheld or forfeited under Regulation 351-A. A Division Bench of this Court in Krishna Kumar v. State of U.P. and others, 1998 (4) AWC 595 , has taken the view that gratuity can be withheld under Section 4 of the Payment of Gratuity Act and pension under Regulation 351-A. Sri Ranjit Saxena however placed reliance upon a recent decision in Bhagwati Prasad Verma v. State of U.P. through Secretary, Basic Education, decided on 10.9.07 [MANU/UP/1246/ 2007] in which the learned Judges have held that gratuity is not covered under Regulation 351-A and that recovery from gratuity can be made under separate rules framed by the State Government, namely Rule 10(1) of U.P. Liberalised Pension Rules, 1961 and Rule 9 of the U.P. Retirement Benefit Rules, 1961. The Division Bench in Bhagwati Prasad Verma’s case did not follow Krishna Kumar’s decision on the ground that Section 4 (6) (1) of the Payment of Gratuity Act, 1972 which provides for forfeiture of gratuity and which was relied upon in Krishna Kumar’s case is not applicable to persons holding posts under the State Government or the Central Government in view of Section 2 (e) of that Act. 4. Both Gratuity and Pension are retirement benefits. They are paid as of right to the employee for past services rendered. The purpose of both is to provide financial security to the retired employee. These are common features between gratuity and pension. However gratuity is a lump sum payment made to the employee on his retirement while pension is a recurring periodical payment to the employee after his retirement usually for the rest of his life. It is in this sense that gratuity and pension are different concepts. Article 366 (17) of the Constitution of India defines pension to include gratuity. This definition was considered by the Apex Court in State of U.P. v. U.P. University Colleges Pensioners’ Association, [MANU/SC/0478/1994] and the Apex Court has held that the legislature often wants to give an enlarged meaning to a particular word and that the definition in clause (17) has enlarged the meaning of the word ‘pension’ and cannot be applied for all purposes. 5. In order to appreciate the controversy we would refer first to the relevant provisions of the Civil Service Regulations relating to the withholding or forfeiture of pension and thereafter shall proceed to consider the impact of the U.P. Liberalised Pension Rules and U.P. Retirement Benefit Rules, 1961. The main part of Regulation 351-A preceding the proviso reads 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 to 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.” 6. It is clear from the provisions of Regulation 351-A that the Government has a right of withholding or withdrawing pension whether permanently or for a specified period and also a right of ordering recovery of the loss from pension. The submission of the petitioner’s counsel is that the word pension used in Regulation 351-A does not include gratuity. The word “pension” however has been defined in Regulation 41 of the Civil Service Regulations as follows : “41. Pension.—Except when the term “Pension” is used in contradistinction to gratuity, “Pension” includes Gratuity.” 7. Regulation 351-A does not refer to gratuity. On a plain interpretation therefore the word "pension” used in Regulation 351-A when read with Regulation 41 would include Gratuity. In Jarnail Singh v. Secretary, Ministry of Home Affairs and others, 1993(1) SCC 47 , the apex Court has considered the question in the context of Rule 9 of the Central Civil Services (Pension) Rules,1972. The question there was whether the expression ‘pension’ in Rule 9 includes gratuity to enable withholding of gratuity in addition to withholding of pension. The definition of pension in Rule 3 (1)(o) is similar to that in Regulation 41 of the Civil Service Regulations. Rule 3 (1)(o) is as follows : “‘Pension’ includes Gratuity except when the term pension is used in contradistinction to gratuity, but does not include Dearness Allowance.” 8. It was held that ‘pension’ includes gratuity. The definition being similar, Jarnail Singh’s case therefore would be applicable for the purpose of interpreting the word pension’ in Regulation 351-A. The Apex Court in an earlier decision D.V. Kapoor v. Union of India and others, 1990 (4) SCC 314 , set aside the order of the President withholding gratuity in addition to pension on the ground that the appellant therein was not charged with nor was given an opportunity that his gratuity would be withheld as a measure of punishment. The learned Judges observed in para 10 of their decision that no provision of law was brought to their notice under which the President is empowered to withhold gratuity after the retirement of a Government Servant as a measure of punishment. The learned Judges observed in para 10 of their decision that no provision of law was brought to their notice under which the President is empowered to withhold gratuity after the retirement of a Government Servant as a measure of punishment. In that case Rule 9 (1) of the Civil Services Pension Rules, 1972 was considered and it was observed that the provision empowers the President to withhold pension permanently or for specified period or to order for recovery from a pensioner of the whole or part of any pecuniary loss caused to the Government. In another decision F.R. Jesuratnam v. Union of India and others, 1990 (Supp) SCC 640, it was held that gratuity was no longer a bounty and it can therefore no longer be regarded as a provision in the discretion of the President as provided in the Pension Regulations and that there is no legal provision empowering the authorities to forfeit the gratuity payable to an employee. In neither of these two cases has the Apex Court interpreted the Rule 351-A of the Civil Service Regulations with which we are here concerned. D.V. Kapoor case (supra) was decided by a Bench of two Judges whereas Jarnail Singh case (supra) is a decision of three Judges. The definition of ‘pension’ in Rule 3 (1)(o) of the Central Civil Services (Pension) Rules, 1972 considered in Jarnail Singh case is similar to Regulation 41 of the Civil Service Regulations. We would therefore follow the decision in Jarnail Singh case. 9. We may now refer to the other provisions of the Civil Service Regulations which have a bearing upon the meaning of the word ‘pension’. 10. Part III of the Civil Service Regulations beginning from Regulation 348-A bears the heading “Ordinary Pension”. Regulation 474 which provides also for gratuity falls under Section II of Part III bearing the heading “Ordinary Pension”. Section II bears the heading “Amount of Pension”. Regulation 474 Clauses (a) and (b) other than the Chart following Clause (b) is extracted below : (a) After a Service of less than ten years, a gratuity not exceeding (except in special cases, and under the orders of the Government of Uttar Pradesh, up to a maximum of 12 months emoluments) one half month’s emoluments for each completed six monthly period of service. If the emoluments of the officer have been reduced during the last three years of his service, otherwise than as a penalty, average emoluments may, at the discretion of the authority which has power to sanction the gratuity, be substituted for emoluments. (b) For Compensation, invalid and Superannuation Pensions. After a Service of not less than ten years an amount not exceeding the following. 11. The provisions of Clause (a) of Regulation 474 make it clear that gratuity is included under the head ‘Amount of Pension’. In fact gratuity is payable under clause (a) of Regulation 474 after a service of less than ten years while superannuation pension is paid after service of not less then ten years. Retiring pensions are also dealt with in Regulation 474. The Civil Service Regulation were amended by the U.P. Civil Service 10th Amendment Regulation, 1983. The amendment introduced Regulation 351-AA providing for a provisional pension where departmental or judicial proceedings are pending against a Government servant on the date of his retirement. Clause 3 of Regulation 919-A provides that no death-cum-retirement gratuity shall be paid to the Government servant until the conclusion of the departmental proceedings or judicial proceedings and issue of final orders thereon. Clause 3 of the Regulation 919-A is quoted below : “(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.” 12. It follows from Regulation 351-AA and Regulation 919-A that final pension or gratuity may not be sanctioned during the pendency of departmental or judicial proceedings. These provisions of Regulation 474 of the Civil Service Regulations read with Regulation 41 indicate that ‘pension’ includes ‘gratuity’ and that the word ‘pension’ in Regulation 351-A would include ‘gratuity’ also. The question that then arises is why if gratuity was already covered under Regulation 351-A it became necessary to frame separate provisions for recovery from gratuity in the form of Rule 10 of the Liberalized Pension Rules, 1961 and Rule 9 of the Retirement Benefit Rules, 1961. Regulation 474 of the Civil Service Regulations provides for payment of gratuity where a Government Servant has put in less than 10 years of service. Regulation 474 of the Civil Service Regulations provides for payment of gratuity where a Government Servant has put in less than 10 years of service. It appears that on death during service, Government Servants of the State of U.P. before the year 1961 were paid only the Government Contribution to the Contributory Pension Provident Fund which in case death had occurred within a short period of the Government Servant joining the fund, was negligible. By the U.P. Liberalized Pension Rules, 1961 and the U.P. Retirement Benefits Rules, 1961 the provisions of death-cum-retirement gratuity and family pension were introduced in respect of the Government Servants of the State. It appears that necessity of providing a separate provision for recovery from gratuity and family pension in the U.P. Rules of 1961 arose to make clear that the newly added liberalized gratuity described as Death-cum-Retirement Gratuity and newly added family pension introduced for benefit of Government Servants of the State could also be subjected to recovery in the circumstances mentioned in Regulation 351-A. It would be pertinent in this connection to refer to the letter of Sri M.L. Deve, Sayunkt Sachiv, No. G-2-2670/X-944-1959 dated Lucknow September 12, 1961 addressed to all the Heads of the department and principal heads of offices published in U.P. Government Servant Pension Manual Alia Law Agency, 1989 Edition Page 146 which indicates the changes brought about by the U.P. Rules. Paragraph 2 of the letter refers to the salient feature of the U.P. Liberalized Pension Rules, 1961. A portion of paragraph 2 (1) of that letter is quoted below : “(1) The amount of pension admissible under Article 474 or 474-A, as the case may be, of the Civil Service Regulations remains the same. However, on retirement a Government servant will get a gratuity instead of the Government contribution to the Contributory Provident Pension Fund.”........... A portion of Paragraph 2 (2) is quoted below : “(2) At present the family of a Government servant, who dies while in service, is paid only the Government contribution to the Contributory Provident Pension Fund, provided that the deceased Government servant was member of that Fund. In case death occurs within a short period of his joining the Fund, the amount of Government Contribution is negligible. In case death occurs within a short period of his joining the Fund, the amount of Government Contribution is negligible. Under the Liberalized Pension Rules, the minimum amount of gratuity admissible to the family of a deceased Government servant is equal to twelve times his emoluments on the date of his death. This gratuity will be admissible even if a Government servant dies only a day after his confirmation. In addition to this gratuity the family of a deceased Government servant, who has rendered not less than 20 years qualifying service, will be able to get a family pension.”........... 13. We shall now refer to Rule 10 of the U.P. Liberalised Pension Rules, 1961 and Rule 9 of the U.P. Retirement Benefit Rules, 1961. Rule 10(1) of the Liberalised Pension Rules, 1961 is as follows : “Governor will have the right to effect recoveries from a gratuity or family pension sanctioned under Parts I and II in the same circumstances as recoveries can be effected from ordinary pension under Article 351-A of the Civil Service Regulations.” 14. Rule 9 (1) of the U.P. Retirement Benefit Rules, 1961 is as follows : “Governor will have the right to effect recoveries from a gratuity or family pension sanctioned under Parts II and III in the same circumstances as recoveries can be effected from ordinary pension under Article 351-A of the Civil Service Regulations.” 15. Rule 10 of the U.P. Liberalized Pension Rules, 1961 and Rule 9 of the U.P. Retirement Benefits Rules, 1961 make it clear that recovery can also be made from the death-cum-retirement gratuity and from family pension in the same circumstances as recovery can be effected from ordinary pension under Article 351-A. 16. The provisions of the aforesaid Rule 10(1) of the U.P. Liberalised Pension Rules and Rule 9(1) of the Retirement Benefit Rules, 1961 apply to a case of recovery where gratuity or family pension has already been sanctioned. Clause 3 of Regulation 919-A specifically provides that no death-cum-retirement gratuity shall be paid to the Government servant until the conclusion of the departmental or judicial proceedings. The effect of clause 3 of Regulation 919-A is that the question of sanction of gratuity to a person against whom on the date of his retirement a criminal case or disciplinary proceedings were pending, would not arise. The effect of clause 3 of Regulation 919-A is that the question of sanction of gratuity to a person against whom on the date of his retirement a criminal case or disciplinary proceedings were pending, would not arise. The Apex Court in State of U.P. and others v. Harihar Bhole Nath, JT 2006(9) SC 567 has observed in para 16 that pension cannot be sanctioned as a matter of course in view of Regulation 470 of the Civil Service Regulations and can be withheld if the services of the employee are not satisfactory. We are in respectful agreement with the view of the Division Bench in Bhagwati Prasad Verma (supra) case that the provisions of the U.P. Liberalized Pension Rules and Retirement Benefit Rules are special provisions. They were also enacted later and would therefore prevail over the Civil Service Regulations. However, it is clear from the provisions of Rule 9 of the U.P. Retirement Benefit Rules, 1961 and Rule 10 of U.P. Liberalized Pension Rules, 1961 that these provisions for recovery would be applicable only where gratuity has been sanctioned. These Rules 9 and 10 of the aforesaid Rules do not cover the subject of payment of gratuity during the pendency of the departmental or judicial proceedings. Clause (3) of Regulation 919-A is a provision which specifically deals with this subject and in view of this provision, payment of death-cum-retirement gratuity has to be deferred until the conclusion of the departmental or judicial proceedings. The Division Bench in Bhagwati Prasad Verma’s case (supra) was not dealing with the cases where departmental or judicial proceedings may have been pending. That was a case where the departmental proceedings had been concluded. The decision in Bhagwati Prasad Verma case (supra) therefore is distinguishable. No doubt the provisions of Rule 9 (1) of U.P. Retirement Benefit Rules, 1961 and Rule 10 of U.P. Liberalized Pension Rules, 1961 would prevail in the matter of recovery from pension sanctioned but in respect of other matters including stoppage of pension and gratuity during pendency of departmental or judicial proceedings the Civil Service Regulation would continue to apply. There however appears to be nothing in Rule 10 (1) of the Liberalised Pension Rules, 1961 or in Rule 9 (1) of the U.P. Retirement Benefits Rules, 1961 which may militate against interpreting the word ‘pension’ in Regulation 351-A to include gratuity. There however appears to be nothing in Rule 10 (1) of the Liberalised Pension Rules, 1961 or in Rule 9 (1) of the U.P. Retirement Benefits Rules, 1961 which may militate against interpreting the word ‘pension’ in Regulation 351-A to include gratuity. These 1961 rules rather provide that the Governor has a right to make recovery from gratuity or family pension in similar circumstances as recoveries can be effected from ordinary pension under Regulation 351-A of the Civil Service Regulations. The words “gratuity” and “pension” in Rule 10 (1) and Rule 9 (1) have no doubt been used in contradistinction to each other but that contradistinction is not to be found in Regulation 351-A. It appears that the provisions of clause 3 of Regulation 919-A supplement Regulation 351-A. Regulation 919-A operates during the period of pendency of departmental or judicial proceedings whereas Regulation 351-A is of wider scope and covers also final orders of recovery forfeiture or withholding of pension and gratuity. This conclusion that the word pension in Regulation 351-A includes gratuity in our opinion flows out of a reading of Regulation 351-A together with the definition of pension in Regulation 41, the provision of gratuity in Regulation 474 which deals with amount of pension and the inclusion of Regulation 474 in Part III which bears the heading ‘Ordinary Pension’ as also from the scheme of Regulation 919-A and the decisions of the Apex Court in Jarnail Singh’s case where a similar definition of pension in the Central Civil Service Pension Rules was involved and from the observations of the Apex Court in paragraph 11 of the reports in State of U.P. and others v. Harihar Bhole Nath, JT 2006 (9) SC 567, that Regulation 351-A takes care of recovery of pecuniary loss from pension and gratuity. We are bound by the decisions of the Apex Court in Harihar Bhole Nath and Jarnail Singh and would therefore follow these decisions. It appears that the provisions of the Regulation 474 of the Civil Service Regulations and those of Regulation 919-A were not brought to the notice of the Division Bench in Bhagwati Prasad Verma (supra) case. We are bound by the decisions of the Apex Court in Harihar Bhole Nath and Jarnail Singh and would therefore follow these decisions. It appears that the provisions of the Regulation 474 of the Civil Service Regulations and those of Regulation 919-A were not brought to the notice of the Division Bench in Bhagwati Prasad Verma (supra) case. We are however in agreement with the view taken therein that in matters of recovery of gratuity and family pension Rules 10 and 9 respectively of the Liberalized Pension Rules, 1961 and Retirement Benefit Rules, 1961 which are special provisions and were enacted after Regulation 351-A would prevail. This interpretation however does not affect the view we have taken that the word ‘pension’ in Regulation 351-A includes gratuity. Moreover there appears to be no inconsistency between the provisions for recovery under the 1961 Rules and Regulation 351-A. The 1961 Rules rather provide that recovery thereunder would be permissible in the same circumstances as provided under Regulation 351-A. So far as the present case is concerned it is clear that under the provisions of Regulation 919-A the petitioner is not entitled to payment of gratuity during the pendency of the criminal case. The provisions/Regulation 919-A have been enacted after the 1961 Rules. In view of the undisputed position that the criminal case is pending against the petitioner no case for interference under Article 226 has been made out. 17. Counsel for the petitioner also relied upon the decision in Mahfooz Husain Khan v. State of U.P., Civil Misc. Writ Petition No. 51050 of 2005 decided on 28.3.06 in which it was directed that the balance amount of the gratuity would be kept in a separate account. The case however does not decide any point of law and the decision was rendered in its own facts. 18. The other contention of the petitioner’s counsel is that certain other persons against whom criminal case is going on are getting full pension and have also been paid gratuity. Their names have been disclosed in the rejoinder affidavit filed in the writ petition. It is not necessary to go into this question for the reason that this case has been taken up for the first time in the rejoinder affidavit. Moreover a person is not entitled to negative equality. Their names have been disclosed in the rejoinder affidavit filed in the writ petition. It is not necessary to go into this question for the reason that this case has been taken up for the first time in the rejoinder affidavit. Moreover a person is not entitled to negative equality. The question of entitlement of the petitioner to payment of gratuity depends upon the applicability of certain rules and regulations. If a person is not entitled to the payment in view of a particular provision he cannot claim parity that under similar circumstance payment is being made to other. The law upon the point is quite clear. In State of Bihar v. Kameshwar Prasad Singh, JT 2000 (5) SC 389 it was held that principles of negative equality cannot be applied by invoking Article 14 of the Constitution in such cases. In the circumstance, we find no merit in this petition. Dismissed. ————