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2014 DIGILAW 1358 (ALL)

STATE OF U. P. v. FAINI SINGH

2014-04-25

SUNIL AMBWANI, VIVEK KUMAR BIRLA

body2014
JUDGMENT By the Court.— This Special Appeal filed by State of UP is directed against the judgment of learned Single Judge dated 11.12.2013 by which he has allowed the writ petition and quashed the order dated 26.11.2013 withholding the retiral benefits payable to the petitioner-respondent except provisional pension, and provident fund on the ground that the State Government does not have authority to withhold the retiral benefits on the pendency of the judicial proceedings against a government servant, who has superannuated, unless there is any allegation of loss to the government and there is any recovery to be made from the petitioner. 2. The Special Appeal is reported to be delayed by 102 days. We have examined the grounds for condonation of delay, which has not been seriously opposed. The grounds relate to delay in getting sanction from the State Government in filing the appeal. The delay in our opinion has been sufficiently explained and is accordingly condoned. The Special Appeal will be given regular number. 3. We have heard Shri A.K. Roy, learned Standing Counsel appearing for the State of UP. Shri A.N. Rai appears for the petitioner-respondent. 4. Learned Single Judge has relied upon a judgment of this Court in Writ Petition No.25554 of 2010 (Lalta Prasad Yadav v. State of UP and others) decided on 15.5.2013; Writ Petition No.26972 of 2013 (Santosh Kumar Singh v. State of U.P. and others) decided on 14.5.2013; Writ Petition No.10099 of 2013 (HC 11AP Mishir Lal v. State of UP and others) decided on 26.2.2013 and Writ Petition No.17141 of 2012 (HC 122 AP Deo Narain Singh v. State of UP and others) decided on 20.7.2012, in which it was held that the State Government does not have powers to withhold the retiral benefits of a superannuated government servant except on well recognised exceptions namely where there is allegation of loss to the government and there is any recovery to be made from the petitioner. 5. Learned Standing Counsel has placed reliance on a Division Bench judgment of this Court in State of UP and others v. Jai Prakash, Special Appeal Defective No.1278 of 2013 decided on 17.12.2013. 5. Learned Standing Counsel has placed reliance on a Division Bench judgment of this Court in State of UP and others v. Jai Prakash, Special Appeal Defective No.1278 of 2013 decided on 17.12.2013. The Division Bench relied on Regulation 351-A of the Civil Services Regulation, which empowers the State Government to recover from the pension the amount of loss found in judicial or departmental proceedings, to have been sustained by the Government by the negligence or fraud during his service. In the said case the Division Bench further found that Regulations 351, 351-A and 351-AA of the Civil Services Regulations operate in different fields. Regulation 351-AA specifically provides that where a departmental or judicial proceeding or any enquiry by the Administrative Tribunal is pending on the date of retirement, a provisional pension under Regulation 919-A may be sanctioned. Regulation 919-A (3) contains a specific prohibition on the payment of Death-Cum-Retirement Gratuity to a government servant until the conclusion of departmental or judicial proceeding and the issue of final orders thereon. 6. The Division Bench in the aforesaid judgment referred to a recent judgment of Supreme Court in the State of Jharkhand and others v. Jitendra Kumar Srivastava and another (Civil Appeal No.6770 of 2013 decided on 14.8.2013) in which it was held that in the absence of any statutory powers the State Government does not have authority to withhold the retiral benefits. The Supreme Court held that right to receive pension has been held in D.S. Nakara and ors v. Union of India, (1983) 1 SCC 305 as a right and the payment of which does not depend upon the discretion of the Government but is governed by the rules. A government servant coming within those rules is entitled to claim pension. The grant of pension does not depend upon anyone’s discretion. It is only for the purpose of quantifying the amount having regard to the period of service and other allied matters that it may be necessary for the authorities to pass an order to that effect, but the right to receive pension flows to an officer not because of the said order but by virtue of the Rules. The Supreme Court relied upon State of Punjab and others v. Iqbal Singh, (1996) II LLJ 377 SC. The Supreme Court relied upon State of Punjab and others v. Iqbal Singh, (1996) II LLJ 377 SC. It was found by the Supreme Court that pension is also a property to which the retiring government servant has a right which cannot be taken away save by authority of law under Article 309 of Constitution of India. 7. The Division Bench in State of U.P. v. Jai Prakash (supra) also found that Rule 43 (b) of Pension Rules of the State of Bihar as applicable to the State of Jharkhand is pari materia to Regulation 351-A of the Civil Service Regulations in the State of UP. 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. The Supreme Court clarified that though there is 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 State of UP there is a specific provision contained in Regulation 351-AA read with Regulation 919-A(3) for withholding payment of gratuity until the conclusion of the criminal trial. 8. Regulation 351-A operates in two areas, namely if the pensioner is found in departmental or judicial proceedings to be guilty of grave misconduct or if the pensioner is found in departmental or judicial proceedings to have caused pecuniary loss to the government by his misconduct or negligence, during service or on re-employment, the Government has the power to withhold or withdraw the pension and a power to recover any pecuniary loss suffered. Regulation 351-A postulates that there has to be a determination in departmental or judicial proceedings. Regulation 351-AA deals with a situation where a departmental or judicial proceeding or any enquiry by the Administrative Tribunal is pending on the date of retirement or is to be instituted after retirement in which case a provisional pension under Regulation 919-A may be sanctioned. Regulation 351-A postulates that there has to be a determination in departmental or judicial proceedings. Regulation 351-AA deals with a situation where a departmental or judicial proceeding or any enquiry by the Administrative Tribunal is pending on the date of retirement or is to be instituted after retirement in which case a provisional pension under Regulation 919-A may be sanctioned. Where a departmental or judicial proceeding is pending on the date of retirement, Regulation 351-AA stipulates that a provisional pension would be admissible and the modalities for the payment of a provisional pension are prescribed under Regulation 919-A. Regulation 919-A (1) makes a reference to the situation which is referred in regulation 351-AA and authorises the payment of a provisional pension by the Head of Department. The provisional pension is to be authorised for the period commencing from the date of retirement upto and including the date of conclusion of departmental or judicial proceedings or, as the case may be, the enquiry by the Administrative Tribunal. Regulation 919-A (3) contains an expression prohibition on the payment of death-cum-retirement gratuity to a government servant until the conclusion of the departmental proceeding, judicial proceeding or as the case may be, an enquiry by the Administrative Tribunal. Regulation 41 provides that except when the term ‘Pension’ is used in contradistinction to gratuity, ‘Pension’ would include gratuity. Consequently, Regulation 919 (3) which contains a bar on the payment of gratuity till the conclusion of a departmental or judicial proceeding would allow the payment of a provisional pension stipulated in clause (1) of Regulation 919-A . 9. In State of U.P. v. Jai Prakash (supra) the respondent, who was the petitioner in the writ petition was facing the criminal trial under Section 498-A of Penal Code read with Section 304-B and 3/4 of Dowry Prohibition Act. The first information report was lodged on 3.5.2009 and a charge sheet was filed before the competent Court on 11.12.2009. In the circumstances the competent authority took a decision to withhold the gratuity and which was justified by virtue of the powers vested in him under Article 351AA read with regulation 919A (1) of Civil Service Regulations. 10. The first information report was lodged on 3.5.2009 and a charge sheet was filed before the competent Court on 11.12.2009. In the circumstances the competent authority took a decision to withhold the gratuity and which was justified by virtue of the powers vested in him under Article 351AA read with regulation 919A (1) of Civil Service Regulations. 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 351AA 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 and 468 IPC, P.S. Dalanwala, District Dehradun against the petitioner in which it was alleged that the first accused alongwith 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. 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. 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. 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.