Case BriefsSupreme Court

Supreme Court: In a case where the Ahmednagar Mahanagar Palika/ Municipal Corporation was giving appointment to the heirs of the employees on their superannuation and/or retirement, the bench of MR Shah* and BV Nagarathna, JJ has held that such appointment is contrary to the object and purpose of appointment on compassionate grounds and is hit by Article 14 of the Constitution of India.

In 2003, Ahmednagar Municipal Council was converted to Ahmednagar Mahanagar Palika. In 1979, when the Municipal Council was in existence, an industrial dispute was raised by the Union with respect to the employment to be given to the heirs of the employees. At the relevant time, it was agreed by the Municipal Council that the employees in Class-IV category (if they die before their retirement) in all departments, except Health Department, if they become invalid, or if they retire, their heirs will be given appointment in their place. Consequently, by judgment and award dated 30.03.1981, the Industrial Court directed that the employees in Class-IV category, if they die before their retirement; if they become invalid, or if they retire, their heirs should be given appointment in their place.

The Supreme Court was of the opinion that,

  • firstly, the judgment and award of the Industrial Court was passed in the year 1981, when the Municipal Council was in existence.
  • secondly, once the Municipal Council was converted to Municipal Corporation/Mahanagar Palika, all the employees under Mahanagar Palika/Municipal Corporation came to be governed by the scheme/rules & regulations framed by the State Government, which does not provide for any appointment on compassionate grounds or the appointment to the heirs of the employees on their superannuation/retirement.

Even otherwise, explaining the scope of compassionate appointment, the Court said that it shall always be treated as an exception to the normal method of recruitment. The appointment on compassionate grounds is provided upon the death of an employee in harness without any kind of security whatsoever. The appointment on compassionate grounds is not automatic and shall be subject to the strict scrutiny of various parameters including the financial position of the family, the economic dependence of the family upon the deceased employee and the avocation of the other members of the family. No one can claim to have a vested right for appointment on compassionate grounds. Therefore,

“appointment on compassionate grounds cannot be extended to the heirs of the employees on their superannuation and/or retirement. If such an appointment is permitted, in that case, outsiders shall never get an appointment and only the heirs of the employees on their superannuation and/or retirement shall get an appointment and those who are the outsiders shall never get an opportunity to get an appointment though they may be more meritorious and/or well educated and/or more qualified.”

Hence, both the Judgment and award passed by the Industrial Court as well as the Bombay High Court in directing the Mahanagar Palika/Municipal Corporation to give appointment to the heirs of the employees on their superannuation and/or retirement, have been held to be unsustainable and hence, quashed and set aside.

[Ahmednagar Mahanagar Palika v. Ahmednagar Mahanagar Palika Kamgar Union, 2022 SCC OnLine SC 1154, decided on 05.09.2022]


*Judgment by: Justice MR Shah


For Municipal Corporation: Advocate Suhas Kadam

For Union: Advocate Iyer Shruti Gopal

Jharkhand High Court
Case BriefsHigh Courts

   

Jharkhand High Court: Anubha Rawat Choudhary, J., while disposing of the instant petition filed against the order passed by the State and the Road Construction Department cancelling the benefits granted under Assured Career Progression (‘ACP') held that if the petitioner is found entitled to any benefit under ACP, then the State will ensure that the monetary benefit of the same is also remitted to the petitioner.

Facts:

The petitioner was an employee of the Road Construction Department and retired in the year 2014. Initially he was appointed to the post of Peon and then promoted to the post of correspondence clerk. He was granted 1st ACP on 09-08-1999 and the 2nd ACP on 06-12-2002 but the petitioner did not pass the required departmental examination. At the time of examination, the petitioner had not attained the age of 50 which was a pre- requisite for granting exemption from passing the departmental examination.

In a memo dated 10-02-2012, it was mentioned that the petitioner has reached his superannuation and has a clear service record therefore, a recommendation is made for his exemption from passing the departmental examination.

Arguments:

The counsel for the petitioner contends that the ACP benefits granted to the petitioner in the year 2002 were cancelled 3 years after the date of superannuation and 15 years from the date of grant of the said benefits.

The counsel for the petitioner contended that no opportunity was given to the petitioner to be heard before cancelling the ACP benefits.

Further the counsel contended to immediately release the entire post retiral benefit including gratuity and arrears of pension due since August 2014 which was arbitrarily withheld on account of cancellation of ACP benefits granted to the petitioner in the year 2002.

The counsel for the respondent contended that the petitioner has already been paid substantial retirement benefit.

The counsel for the respondent further contended that the letter was only a recommendation which was made while the petitioner was still in service.

Observation and Analysis:

The Court stated that the promotion given in the year 1978 to the post of correspondence clerk was not cancelled. A recommendation was made at a later stage for granting exemption to the petitioner from passing the required departmental examination, but the outcome of such recommendation was not brought on record by either party.

Further, the Court directed the petitioner to file a representation before the Superintending Engineer, Road Construction Department who will look into the matter and pass appropriate order, considering the various circulars/ guidelines of the Government regarding grant of exemption from passing the departmental examination.

The Court also held that if the petitioner is found entitled to any benefit arising out of any order which will be passed pursuant to this order, then the State will take steps to ensure that the monetary benefit of the same is also remitted to the petitioner within a period of three months from the date of passing of the reasoned order.

[Lodo Oraon v. State of Jharkhand, 2022 SCC OnLine Jhar 845, decided on 12-07-2022]


Advocates who appeared in this case :

Mr. Prem Pujari Roy, Advocate, for the Petitioner;

Mrs. Darshana Poddar Mishra, A.A.G.-I, Advocates, for the Respondents.

Legislation UpdatesNotifications

On 14-07-2022, the Ministry of Finance has notified that the deposits made under the Special Deposit Scheme for Non-Government Provident, Superannuation and Gratuity Funds shall with effect from 01-07-2022 to 30-09-2022  will bear interest at 7.1%.

Case BriefsHigh Courts

Orissa High Court: S.K Panigrahi, J. dismissed the petition and remarked “no application for alteration of date of birth after five years from the joining date will be entertained.”

The instant writ petition was filed for correction of the date of birth from 01-02-1963 to 01-02-1965 which was wrongly recorded in the petitioner’s service book entry. The petitioner is currently employed as a peon in the Dinapadma High School, Baghamund, in the district of Bolangir and has made representations that his date of birth has been wrongly recorded. 

Counsel for the petitioner submitted that if the date of birth of the petitioner is not subjected to correction within the optimal amount of time, then the petitioner will face the problem of premature retirement and irreparable loss & injury.

A notification (No.2102 – 2R/1-27/94-Gen) issued by the Government of Orissa dated 30th January, states

“(i) No alternation of the date of birth once recorded in the Service Book/Service Roll of an employee, shall be made excepting in case of clerical error without prior approval of the State Government. An application for effecting a change in the date of birth shall be summarily rejected if a) filed after five years of entry into Government service, or b) the change would lower the applicant’s age to an extent that he/she would have been ineligible to appear in any of the academic or recruitment examination for appointment to any service or post under the Government.”

 The Court relied on the Supreme Court judgment named Secretary and Commissioner, Home Department v. R. Kirubakaran, AIR 1993 SC 2647 wherein it was observed

“…….As such whenever an application for alteration of the date of birth is made on the eve of superannuation or near about that time, the court or the tribunal concerned should be more cautious because of the growing tendency amongst a section of public servants to raise such a dispute without explaining as to why this question was not raised earlier…….”

 “An application for correction of the date of birth by a public servant cannot be entertained at the fag end of his service. It need not be pointed out that any such direction for correction of the date of birth of the public servant concerned has a chain reaction, inasmuch as others waiting for years, below him for their respective promotions are affected in this process.

the court must be fully satisfied that there has been real injustice to the person concerned and his claim for correction of date of birth has been made in accordance with the procedure prescribed, and within time fixed by any rule or order. The onus is on the applicant to prove about the wrong recording of his date of birth in his service book.”

The Court thus noted that the application is time-barred and was not filed within five years from the date of joining. In the instant case, according to the notification it was made clear that no alteration of the entry should be allowed after five years.

 The Court held “petitioner’s claim is time-barred and hence, cannot be entertained.”[Ugrasen Sahu v. State of Odisha, 2022 SCC OnLine Ori 1468, decided on 27-05-2022]


 Appearances

For Petitioners: Ms D.J. Sahu

For Opp. Parties: Mr Biswajit Mohanty


Arunima Bose, Editorial Assistant has reported this brief. 

Case BriefsHigh Courts

Gujarat High Court: Biren Vaishnav, J., reiterated that, interest on delayed payment of gratuity is mandatory and not discretionary.

The petitioner had prayed for a declaration that the respondent’s action in not paying the entire amount of Rs 10 lakhs towards gratuity to the petitioner was arbitrary. Hence, a direction was sought that respondents be directed to pay the remaining amount of gratuity to the petitioner along with 18% interest from the date of his retirement.

Analysis and Decision


High Court expressed that, in the Supreme Court decision of H. Gangahanume Gowda v. Karnataka Agro Industries Corpn. Ltd., (2003) 3 SCC 40, it was decided that the interest on delayed payment of gratuity is mandatory and not discretionary. When it is not the case of the respondent that the delay in the payment of gratuity was due to the fault of the employee and that it had obtained permission in writing from the controlling authority for the delayed payment on that ground, the respondent had been directed to pay interest @ 10% on the amount of gratuity to which the appellant is entitled from the date it became payable till the date of payment of the gratuity amount. 

Hence, Bench stated that the present case was covered by the Supreme Court’s decision as stated above.

Therefore, Court directed the respondents to pay the petitioner the amount of gratuity of Rs 10 lakhs within a period of 10 weeks, and since the petitioner was superannuated in 2013 and the gratuity amount had been wrongfully withheld, the petitioner shall be entitled to interest at the rate of 9% from the date of his superannuation till the date of actual payment. [Ashvinkumar Ramniklal Jani v. State of Gujarat, 2022 SCC OnLine Guj 575, decided on 19-4-2022]


Advocates before the Court:

MR JAYRAJ CHAUHAN(2966) for the Petitioner(s) No. 1

MR MUKESH N VAIDYA(5197) for the Petitioner(s) No. 1

MR MUKUND M DESAI(286) for the Petitioner(s) No. 1

MS.SURBHI BHATI, AGP for the Respondent(s) No. 1,2,3

NOTICE SERVED BY DS for the Respondent(s) No. 4

Case BriefsHigh Courts

Bombay High Court: The Division Bench of R.D. Dhanuka and S.G. Mehare, JJ., expressed that, for condoning the interruption in service, the total service pensionary benefit in respect of which will lost should not be less than five years duration, excluding one or two interruptions.

Question for Determination


Whether the employee can seek condonation of interruption in service to enhance the pension where the employee has qualifying service for pension?

Factual Background


The petitioners were permanent in service as teachers in Municipal Corporation. However, before permanency, there were interruptions in their service from the date of their first temporary appointments.

The Maharashtra Civil Services (Pension) Rules, 1982 were made applicable to the employees of Aurangabad Municipal Corporation.

Qualifying service is sine qua non for pension.

‘Qualifying service’ means a service that may be considered in determining whether an employee is eligible by the length of service for a pension. 

It was noted that as per Rule 30 of the Pension Rules, ten years of qualifying service is a condition precedent for the entitlement of pension. Where the employee retires on superannuation or is declared permanently incapacitated for further service, or voluntarily retires after twenty years of service, the employees’ service is to be counted for qualifying service for pension. The servant, at the time of retirement, shall hold substantively a permanent post.

Condonation of breaks in service for enhancement of pension and other retiral benefits

The appointing authority has a discretionary power to condone the interruption in service provided, the interruptions should have been caused by reasons beyond the control of the Government servant.

In view of the pension scheme, where the employee in substantive service has rendered the service less than ten years, then his previous temporary or officiating service is counted for completing the minimum ten years of service subject to the other rules and his personal service record.

Conjoint Reading Rules 30, 33, 48 and 110 of Pension Rules elucidate that the pension scheme is for the benefit of the employee, and the amount of pension is determined by the length of qualifying service.

High Court opined that, if the service of an employee at his superannuation is less than ten years, then the previous temporary or officiating service needed to be counted for the qualifying service for pension.

Bench also added that, the purpose of condoning the interruptions in service is to make an employee entitled to the pension by adding the days of his service and not to enhance the pension for the reason that the pension is to be calculated and paid on the basis of last salary drawn on the substantive permanent post.

Hence, the petitioners were eligible for pension as per the Pension Rules and not entitled to claim the condonation of the interruption in their services to enhance their pension.

In view of the above, petitions were dismissed. [Muktabai v. State of Maharashtra, 2022 SCC OnLine Bom 887, decided on 22-4-2022]


Advocates before the Court:

Mr. D.R. Irale Patil, Advocate for the Petitioners.

Ms. R.P. Gaur, AGP for respondent/State.

Mr. A.P. Bhandari, Advocate for Respondent Nos.2 &

Case BriefsSupreme Court

Supreme Court: The Division Bench of M.R. Shah and B.V. Nagarathna*, JJ., held that the action of the selectively applying the proviso to Rule 25(a) in relation  to one person, while not applying the said proviso in relation to similarly situated persons, is arbitrary and therefore illegal. The Bench stated,

“We accept the settled position of law that the rule applicable in matters of determination of pension is that which exists at the time of retirement, we are unable to find any legal basis in the action of the respondent University of selectively allowing the benefit of Rule 25 (a).”

Factual Matrix

The appellant joined as a Lecturer in the School of Legal Studies in Cochin University of Science and Technology on 07-09-1984. Prior to such appointment, the appellant was a lawyer practising in the District Court and Subordinate Courts and High Court of Kerala. The appellant made a representation before the Registrar of the University, requesting to reckon his practice of eight years at the Bar for the purpose of determining his pensionary benefits payable to him on his superannuation as provided under Rule 25 (a), Part III of Kerala Service Rules.

The respondent rejected the request of the appellant on the ground that the proviso to Rule 25 (a), Part III, KSR provides that the benefit under Rule 25 (a) would be available only to such employees who are recruited when practising at the Bar, to those posts requiring a qualification in law and experience at the Bar. Therefore, the respondent opined that since experience at the Bar was not essential for appointment to teaching posts at the University, the question of reckoning previous experience at the Bar would not arise in relation to the appellant.

The appellant stated in his appeal petition before the Chancellor that the proviso to Rule 25 (a), Part III, KSR was inserted in said Rule with effect from 12th February 1985. The appellant contended that the proviso could not be made applicable to him as the same was not in force as on the date on which he joined service at the respondent University. On the other hand, the respondent maintained that the Government or any other statutory body has the right to modify the service conditions, even retrospectively. The respondent further stated that since the proviso was introduced in Rule 25 (a) while the appellant was still in service, the proviso would apply to him.

Findings of the Court

Noticeably, in the case of one Dr. P. Leela Krishnan, a Professor of Law who was similarly situated as the appellant, the respondent University had duly considered the period of practice at the Bar as a part of qualifying service for the purpose of determining pension payable on superannuation, as perusal of extracts from the pension book of Dr. P. Leela Krishnan, revealed that his experience of practice at the Bar of 7 years, 2 months and 26 days was added to the period of his service at the  University, being 26 years, 9 months and 2 days. Accordingly, the respondent University had in determining his superannuation pension, considered 33 years, 7 months and 4 days as the qualifying period of service.

“Considering that no argument had been advanced on behalf of the respondents as to the manner in which the case of the appellant is different from that of Dr. P. Leela Krishnan and on what basis the benefit of Rule 25 (a) was granted to Dr. P. Leela Krishnan but was withheld in relation to the appellant.”

Pointing out the similarities between the two, the Bench stated, both these individuals were appointed as teaching faculty at the respondent University after practicing as advocates in various Courts of Kerala. They were both appointed before the proviso to Rule 25 (a) came into effect, i.e. before 12-02-1985 and retired after the said proviso came into force.

“In the circumstances, we find no valid ground to sustain the application of the proviso in relation to the appellant, thereby denying the benefit of Rule 21 25(a), when the same was not applied in the case of Dr. P. Leela Krishnan, thereby allowing the benefit of Rule 25(a).”

The law, as recognized in Deoki Nandan Prasad v. State of Bihar, (1971) 2 SCC 330, and Government of Andhra Pradesh v. Syed Yousuddin Ahmed, (1997) 7 SCC 24, states that the pension payable to an employee on retirement shall be determined on the rules existing at the time of retirement. However, the Bench stated, law does not allow the employer to apply the rules differently in relation to persons who are similarly situated. Therefore, the Bench opined that if the respondent University sought to deny the benefit of Rule 25 (a), in light of the proviso which was subsequently inserted thereby limiting the benefit of the Rule, it ought to have done so uniformly; as the proviso could have been made applicable in relation to all employees who retired from service of the respondent University following the introduction of the proviso, i.e. after 12-02-1985.

Conclusion

In the light of above, the Bench held that the denial of the benefit under Rule 25 (a), KSR, to the appellant was arbitrary and not in accordance with law. Consequently, the appellant was held entitled to receive pension having regard to his total qualifying service, inclusive of the period of his service at the respondent University and the period of his practice as an Advocate in various Courts of Kerala.

Accordingly, the impugned judgment of the High Court, whereby it was approved the action of respondent university was set aside. The respondent University was directed to calculate the amount of pension short paid to the appellant from the date of his superannuation and disburse such amount together with interest at the rate 5% p.a. till date of payment in favour of the appellant.

[G. Sadasivan Nair v. Cochin University of Science and Technology, 2021 SCC OnLine SC 1155, decided on 01-12-2021]


Kamini Sharma, Editorial Assistance has put this report together 


Appearance by:

For the Appellant: K.P. Kylasanatha Pillay, Senior Counsel along with Sajith P. Warrier, Counsel

For the Respondents: Malini Poduval, Counsel

For the State: G. Prakash Counsel


*Judgment by: Justice B.V. Nagarathna

 

Tags: Service Law, Government Servant, University, Teacher, Bar Council, Experience, Retirement, Superannuation, Pension

Case BriefsSupreme Court

Supreme Court: The bench of R. Subhash Reddy* and Sanjiv Khanna, JJ has held that reinstatement with full back wages is not automatic in every case, where termination/dismissal is found to be not in accordance with procedure prescribed under law.

The ruling came in the matter where,

  • A Clerk-cum-Cashier was dismissed by the Allahabad Bank, alleging his involvement in the incident relating to burning of relevant Bank records.
  • The respondent was appointed in the Bank as Clerk–cum– Cashier on 23.09.1985 and he was placed under suspension on 13.02.1989 and dismissed from service vide Order dated 22.08.1991.
  • The Industrial Tribunal–cum–Labour Court found that though there was a strong suspicion, but there was no sufficient evidence to prove his misconduct to dismiss from service. However, on the ground that a case is made out by the management of loss of confidence, ordered payment of compensation of Rs.30,000/- in lieu of reinstatement.
  • The respondent, aggrieved by the award of the Industrial Tribunal–cum–Labour Court, seeking reinstatement with back wages, carried the matter to the High Court wherein it was held that suspicion, however, high may be, can under no circumstances be held a substitute to legal proof. The High Court, hence, directed reinstatement with all consequential benefits.
  • The directions issued by the High Court of Allahabad for reinstatement were stayed by this Court on 23.08.2019. During the pendency of these proceedings, the respondent – workman had attained age of superannuation.

Considering the aforementioned facts and circumstances, the Supreme Court held,

“Though, there was strong suspicion, there was no acceptable evidence on record for dismissal of the workman. However, as the workman has worked only for a period of about six years and he has already attained the age of superannuation, it is a fit case for modification of the relief granted by the High Court.”

Noticing that reinstatement with full back wages is not automatic in every case, where termination / dismissal is found to be not in accordance with procedure prescribed under law, the Court held that in the present case, the ends of justice would be met by awarding lump sum monetary compensation. It, hence, directed payment of lump sum compensation of Rs.15 lakhs to the respondent, within a period of eight weeks, failing which, the respondent will be entitled for interest @ 6% per annum, till payment.

[Allahabad Bank v. Krishan Pal Singh, 2021 SCC OnLine SC 751, decided on 20.09.2021]

______________________________________________

Appearances before the Court:

For Bank: Advocate Rajesh Kumar Gautam

For Respondent: Advocate Rakesh Taneja


*Judgment by: Justice R. Subhash Reddy

Know Thy Judge| Justice R. Subhash Reddy

Case BriefsSupreme Court

Supreme Court: The Division Bench of Hemant Gupta and A.S. Bopanna, JJ., expressed that

Government accommodation is only meant for in-service officers and not for the retirees or those who have demitted office.

The right to shelter does not mean right to government accommodation.

Challenge 

Decision of the Punjab and Haryana High Court has been challenged in the present matter.

Background

Single Bench allowed the petition of a Kashmiri migrant, respondent – Onkar Nath Dhar who shifted to Jammu in the year 1989 or so. He was transferred to the office of the Intelligence Bureau in Delhi. Later, he was transferred to Faridabad, wherein he was allotted a government accommodation. Respondent attained the age of superannuation in the year 2006.

Respondent on making a representation to the appellant was allowed to retain the government accommodation till the circumstances prevailing in Jammu and Kashmir improve and Government makes it possible for him to return to his native place.

An eviction order was passed against Dhar under Public Premises (Eviction of Unauthorised Occupant) Act, 1971, but the same was stayed by the Additional District Judge, Delhi.

Later, the Single Judge Bench relied upon an order passed by this Court in J.L. Koul v. State of J&K, (2010) 1 SCC 371, wherein it was held that it was not possible for Dhar to return to his own State and that due to which eviction order shall be kept in abeyance. The same was affirmed by the Division Bench of Punjab and Haryana High Court.

Analysis, Law and Decision

Supreme Court opined that the High Court Orders were unsustainable.

In view of the plethora of Judgments referred by the Court, Bench affirmed that

Government accommodation could not have been allotted to a person who had demitted office. No exception was carved out even in respect of the persons who held Constitutional posts at one point of time.

Therefore, decision of the Punjab and Haryana High Court was erroneous on the basis of compassion showed to displaced persons on account of terrorist activities in the State.

Further, reasoning its decision, Bench stated that compassion could be shown for accommodating the displaced persons for one or two months but to allow them to retain the Government accommodation already allotted or to allot an alternative accommodation that too with a nominal licence fee defeats the very purpose of the Government accommodation which is meant for serving officers.

If a retired government employee have no residence, they have an option to avail transit accommodation or to receive cash compensation in the place of transit accommodation. 

Right to Shelter?

Elaborating more, the Court stated that the right of shelter is taken care of when alternative Transit accommodation is made available to the migrant to meet out the emergent situation.

Government accommodation is meant for serving officers and officials and not to the retirees as benevolence and distribution of largesse.

Policy of Centre to provide accommodation? | Terrorism in J&K

Answering in negative, Court stated that Centre or State do not have any policy to provide the accommodation to displaced persons on account of terrorism in the State of Jammu and Kashmir.

Adding to the above discussion, Bench held that there is no indefeasible right in any citizen for allotment of government accommodation on a nominal licence fee.

In view of the decision of J.L. Koul  v. State of J&K, (2010) 1 SCC 371  the Kashmiri migrants are entitled to transit accommodation and if transit accommodation could not be provided then money for residence and expenses.

Dhar and such like persons are not from the poorest section of the migrants but have worked in the higher echelons of the bureaucracy. To say that they are enforcing their right to shelter only till such time the conditions are conducive for their safe return is wholly illusory.

Concluding the matter, Supreme Court found that the orders of the High Courts were wholly arbitrary and irrational, therefore the present appeal was allowed.

Though, the Court directed respondent-Dhar to hand over vacant physical possession of the premises on or before 31-10-2021, i.e., after 15 years of his attaining the age of superannuation. [Union of India v. Onkar Nath Dhar, 2021 SCC OnLine SC 574, decided on 5-08-2021]

Case BriefsTribunals/Commissions/Regulatory Bodies

Central Administrative Tribunal (CAT):  Aradhana Johri, Member (A), partly allowed the instant application whereby the applicant had sought for issuance of directions for the release of gratuity and leave encashment which had been illegally withheld by the respondent.

The applicant was appointed to the post of Constable with the respondents on 31-07-1975. A CBI case was registered against the applicant under PC Act and he was suspended with effect from 09-11-1995. However, the suspension was subsequently revoked vide an order dated 28-03-2000. On 02-08-2001, the applicant was convicted by the Trial Court and, consequently, was dismissed from service. Again, the applicant was subsequently reinstated and superannuated on attaining the age of retirement on 31-08-2015. Though the applicant was paid provisional pension, his gratuity and leave encashment for 278 days leave which stood to his credit had been illegally withheld.

As per Rule 69 of the Central Civil Services (PensionRules1972

“(1)(c) No gratuity shall be paid to the Government servant until the conclusion of the departmental or judicial proceedings and issue of final orders thereon.”

The Tribunal relied on Mahanadi Coalfields Ltd. v. Rabindranath Choubey, 2020 SCC OnLine SC 470, wherein the Supreme Court had held that it was permissible for the employer to withhold the payment of gratuity even after the employee had attained his superannuation from service because of the pendency of disciplinary proceedings against him in view of Rule 34.3 of the Rules, 1978, the employer had a right to withhold gratuity during pendency of disciplinary proceedings.

Further, the Tribunal observed that 39 (3) reads as follows:

“(3) The authority competent to grant leave may withhold whole or part of cash equivalent of earned leave in the case of a Government servant who retires from service on attaining the age of retirement while under suspension or while disciplinary or criminal proceedings are pending against him.”

Consequently, the Tribunal ordered that leave encashment of 286 days should be paid to the applicant since the plea of money becoming recoverable had not been taken by the respondents. However, the demand of the applicant for release of gratuity and interest had been rejected.[Baldev Singh v. Union of India, O.A. 879 of 2020, decided on 02-03-2021]


Kamini Sharma, Editorial Assistant has reported this brief.

Armed Forces Tribunal
Case BriefsTribunals/Commissions/Regulatory Bodies

Armed Forces Tribunal (AFT): The Division Bench of Justice Umesh Chandra Srivastava (Chairperson) and Vice Admiral Abhay Raghunath Karve (Member) allowed an application for disability pension filed under Section 14 of the Armed Forces Tribunal Act, 2007.

The applicant was enrolled in Army on 28-02-1994 and was discharged on 29-02-2016 in Low Medical Category on completion of service limits under Rule 13 (3) Item III (i) of the Army Rules, 1954. The Release Medical Board (RMB) assessed his disabilities (i) Obesity (E-66) at 5% for life, (ii) Type II Diabetes Mellitus (E-11) at 20% for life, (iii) Dyslipidemia (E-78.0) at 5% for life and (iv) ACL Tear Complete (RT) OPTD (S-83.5) at 20% for life, composite at 40% for life and opined the disabilities to be neither attributable to nor aggravated (NANA) by service. The applicant approached the respondents for grant of disability pension but the same was rejected.

The questions before the Tribunal were of two-fold:

(a) Whether the disabilities of the applicant were attributable to or aggravated by Military Service?

(b) Whether the applicant was entitled to the benefit of rounding off the disability pension?

The Tribunal, while relying on Dharamvir Singh v. Union of India, (2013) 7 SCC 316, held that reasoning of RMB for denying disability pension stating that injury (i) to (iii) were lifestyle disease and injury (iv) occurred when the applicant was on leave, was not convincing and did not reflect the complete truth on the matter. Since, injury (i) to (iii) started after the applicant had served 20 years of service the benefit of the doubt should be given to the applicant and second and third disabilities of the applicant should be considered as aggravated by military service. Regarding injury (iv), the Tribunal observed that applicant suffered an injury while going to join on permanent posting, hence, it should be treated to have causal connection with military service and the same should be considered attributable to or aggravated by military service.

On the point of rounding off of disability pension, the Tribunal cited Union of India v. Ram Avtar, 2014 SCC OnLine SC 1761, wherein the Supreme Court held that, “an individual, who has retired on attaining the age of superannuation or on completion of his tenure of engagement, if found to be suffering from some disability which is attributable to or aggravated by the military service, is entitled to be granted the benefit of rounding off of disability pension.”

In view of the above, the Tribunal set aside the impugned order holding that benefit of rounding off of disability pension at 40% for life should be rounded off to 50% for life and be extended to the applicant from the date of his discharge. The disabilities of the applicant were held as aggravated by Service and the respondents were directed to comply with the order within a period of four months from the date of receipt of a certified copy of this order. Further, the interest of 9% per annum was awarded for default till actual payment. [Krishna Kumar v. Union of India, O.A. No. 14 of 2019, decided on 09-12-2020]

Case BriefsHigh Courts

Bombay High Court: A Division Bench of R.K. Deshpande and N.B. Suryawanshi, JJ., while addressing an issue with regard to the deduction of pension by the Bank without any confirmation from the employer, observed that,

“The pension payable to the employees upon superannuation is a ‘property’ under Article 300-A of the Constitution of India and it constitutes a fundamental right to livelihood under Article 21 of the Constitution of India.”

“Pension cannot be deducted without authority of law.”

Petitioner a retired assistant foreman had a basic pension of Rs 1,334 as on 01-10-1994, consequent upon an increase in the pension and dearness allowance, the basic pension of Rs 25, 634 was fixed, for which the petitioner was entitled to and accordingly he was paid.

Right to Information Act, 2005

In the month of August, 2019 petitioner’s pension was reduced without consent or knowledge of the petitioner and thus he filed an application under the Right to Information Act, 2005 to know the reason for deduction and details as to the revision of the pension during the period 2015-16 and 2016-17.

Excess Payment of Pension

Respondent stated that there was an excess payment of pension to the petitioner.

Petitioner in view of the above approached the Court challenging the action of the respondent and sought a further direction to the respondents to restore the position in respect of payment of pension, prevailing prior to the deduction which commenced from 01-08-2019.

Excess Payment by SBI

State Bank of India-respondent stated that an amount of Rs 872 per month was erroneously paid in excess to the petitioner due to technical error in the system.

Reserve Bank of India

According to Circular No.RBI/2015-16/340-DGBA.GAD.No.2960/45.01.001/2015-16 dated 17-3-2016, clause (c), the bank claims to have an authority to recover the excess payment to the petitioner.

“c) In case the pensioner expresses his inability to pay the amount, the same may be adjusted from the future pension payments to be made to the pensioners. For recovering the over-payment made to pensioner from his future pension payment in installments 1/3rd of net (pension + relief) payable each month may be recovered unless the pensioner concerned gives consent in writing to pay a higher installment amount.”

Employer’s stand is very clear in the present case that the fixation of the petitioner’s pension was correct and proper.

Further, the employer has supported the claim of the petitioner and has no role to play in the matter of reduction of pension or its recovery.

Bench states that it is not the authority of the Bank to fix the entitlement of the pension amount of the employees other than the employees of the respondent-Bank.

Hence the action of the Bank to reduce the pension of the petitioner is unauthorised and illegal.

Furthermore, the Bank has failed to demonstrate any technical error in the calculations.

With regard to the RBI clause as stated above, Court stated that “once we hold that in fact there was no excess payment made to the petitioner, the question of applicability of the instructions issued by the RBI or undertaking given by the petitioner does not arise.” 

Principles of Natural Justice

Without following the principles of natural justice in the manner of either carrying out correspondence with regard to the correctness of the pension or an explanation in respect of the deduction, the said action on the part of the Bank is arbitrary, unreasonable, unauthorised and in flagrant violation of the principles of natural justice.

Breach of Trust

Bank is the trustee of the pensioner’s account and has no authority in the eyes of the law to dispute the entitlement of the pension payable to the employees other than those who are employed in the bank.

To tamper with the account is nothing but a breach of trust.

Court directed Bank to refund the amount of Rs 3,26,045 to the petitioner by crediting it in his pension account with interest at the rate of 18% p.a. from the date of deduction.

Further, the bank is required to be directed to pay the costs of Rs 50,000 to the petitioner towards the expenses of this petition.

Unfortunately, the time has come to tell the Bank that the aging is natural process, which leads to weakening of the body and mind.

Adding to its conclusion, Court stated that the Bank officials must realize that tomorrow it may be their turn, upon superannuation, to fight for the pension or post-retiral benefits. The thought process, therefore, to be adopted should be of a person in a situation like the petitioner.

Respect, dignity, care, sensitivity, assistance, and security would automatically follow.

Senior Citizens

It is a high time for the Banks to create a separate cell and to device a method to provide personal service through the men of confidence, at the door-step to the old aged, disabled and sick persons who are the senior citizens.

Bench directed registry to forward the copies of the Judgment to the Centralized Processing Pension Centres of all the Nationalized Banks and also to the Reserve Bank of India and the Chief Secretary, Government of Maharashtra, to consider the question of the constitution of separate cell and release of appropriate guidelines so as to attain the constitutional goal of providing respect, dignity, care, sensitivity, assistance and security to all the pension account holders in the Banks.[Naini Gopal v. Union of India, LD-VC-CW-665 of 2020, decided on 20-08-2020]

Case BriefsSupreme Court

Supreme Court: In a 2:1 verdict, the 3-judge bench of Arun Mishra, MR Shah and Ajay Rastogi, JJ has held that the disciplinary authority has powers to impose the penalty of dismissal/major penalty upon the employee even after his attaining the age of superannuation if the disciplinary proceedings were initiated while the employee was in service in view of the Conduct, Discipline and Appeal Rules.

Issues before the Court

The Court was deciding the below mentioned issues and while all 3-judge agreed on the answer to the first Issue, Justice Rastogi, disagreed with the majority ruling in the second issue.

  • Issue 1: Whether is it permissible in law for the employer to withhold the payment of gratuity of the employee, even after his superannuation from service, because of the pendency of the disciplinary proceedings against him?
  • Issue 2: Where the departmental enquiry had been instituted against an employee while he was in service and continued after he attained the age of superannuation, whether the punishment of dismissal can be imposed on being found guilty of misconduct in view of Rule 34.2 of the Conduct, Discipline and Appeal Rules, 1978 (CDA Rules) made by Mahanadi Coalfield Limited?

Issue 1:

All 3 judges unanimously held it is permissible for the employer to withhold gratuity even after retirement/superannuation during pendency of the disciplinary proceedings as per Rule 34.3 of the CDA Rules.

Rule 34.3 of the CDA Rules permits withholding of the gratuity amount during the pendency of the disciplinary proceedings, for ordering recovering from gratuity of the whole or part of any pecuniary loss caused to the company if have been guilty of offences/misconduct as mentioned in subsection 6 of Section 4 of the Payment of Gratuity Act, 1972 or to have caused pecuniary loss to the company by misconduct or negligence, during his service. It further makes clear that Rule 34.3 for withholding of such a gratuity would be subject to the provisions of Section 7(3) and 7(3A) of the Payment of Gratuity Act, 1972 in the event of delayed payment in the case of an employee who is fully exonerated. There is no inconsistency between sub-section 6 of Section 4 of the Payment of Gratuity Act and Rule 34.3 of the CDA Rules.

Also, once it is held that a major penalty which includes the dismissal from service can be imposed, even after the employee has attained the age of superannuation and/or was permitted to retire on attaining the age of superannuation, provided the disciplinary proceedings were initiated while the employee was in service, sub-­section 6 of Section 4 of the Payment of Gratuity Act shall be attracted and the amount of gratuity can be withheld till the disciplinary proceedings are concluded.

Issue 2:

Justice Shah, for himself and Justice Mishra

The punishment which is prescribed under Rule 27 of the CDA Rules, minor as well as major, both can be imposed. Apart from that, recovery can also be made of the pecuniary loss caused as provided in Rule 34.3 of the CDA Rules, which takes care of the provision under  sub­section (6) of Section 4  of the Payment of Gratuity Act, 1972. The recovery is in addition to a punishment that can be imposed after attaining the age of superannuation. The legal fiction provided in Rules 34.2 of the CDA Rules of deemed continuation in service has to be given full effect.

Considering the provisions of Rules 34.2 and 34.3 of the CDA Rules, the inquiry can be continued given the deeming fiction in the same manner as if the employee had continued in service and appropriate punishment, including that of dismissal can be imposed apart from the forfeiture of the gratuity wholly or partially including the recovery of the pecuniary loss as the case may be.

“Several service benefits would depend upon the outcome of the inquiry, such as concerning the period during which inquiry remained pending. It would be against the public policy to permit an employee to go scot­free after collecting various service benefits to which he would not be entitled, and the event of superannuation cannot come to his rescue and would amount to condonation of guilt. Because of the legal fiction provided under the rules, it can be completed in the same manner as if the employee had remained in service after superannuation, and appropriate punishment can be imposed.”

Further, various provisions of the Payment of Gratuity Act, 1972 do not come in the way of departmental inquiry and as provided in Section 4(6) of Gratuity Act and Rule 34.3 of CDA Rules in case of dismissal gratuity can be forfeited wholly or partially, and the loss can also be recovered. An inquiry can be continued as provided under the relevant service rules as it is not provided in the Payment of Gratuity Act, 1972 that inquiry shall come to an end as soon as the employee attains the age of superannuation.

The Gratuity Act does not deal with the matter of disciplinary inquiry, it contemplates recovery from or forfeiture of gratuity wholly or partially as per misconduct committed and does not deal with punishments to be imposed and does not supersede the Rules 34.2 and 34.3 of the CDA Rules. The mandate of Section 4(6) of recovery of loss provided under Section 4(6)(a) and forfeiture of gratuity wholly or partially under Section 4(6)(b) is furthered by the Rules 34.2 and 34.3. If there cannot be any dismissal after superannuation, intendment of the provisions of Section 4(6) would be defeated.

Justice Rohatgi, dissenting

After conclusion of the disciplinary inquiry, if held guilty, indeed a penalty can be inflicted upon an employee/delinquent who stood retired from service and what should be the nature of penalty always depends on the relevant scheme of Rules and on the facts and circumstances of each case, but either of the substantive penalties specified under Rule 27 of the CDA Rules, 1978 including dismissal from service are not open to be inflicted on conclusion of the disciplinary proceedings and the punishment of forfeiture of gratuity commensurate with the nature of guilt may be inflicted upon a delinquent employee provided under Rule 34.3 of CDA Rules, 1978 read with sub­section (6) of Section 4 of the Payment of Gratuity Act, 1972.

[Chairman-­cum­-Managing Director, Mahanadi Coalfields Limited v. Rabindranath Choubey, 2020 SCC OnLine SC 470 , decided on 27.05.2020]

COVID 19Legislation UpdatesNotifications

In view of the unprecedented situation arising out of country-wide lockdown declared by the Government consequent to the outbreak of COVID-19, it is clarified that the central Government employees who are attaining the age of superannuation on 31st March, 2020 in terms of Fundamental Rule 56 and due to retire, shall retire from Central Government service on 31st March, 2020, irrespective of whether they are working from home or working from office.


Ministry of Personnel, Public Grievances & Pensions

[Press Release dt. 31-03-2020]

[Source: PIB]

Jharkhand High Court
Case BriefsHigh Courts

Jharkhand High Court: The Bench of Aniruddha Bose, C.J. and B.B. Mangalmurti, J. dismissed a petition claiming arrears of pension, post retrial benefits with statutory and penal interest.

In the present case the appellant was appointed as Chairman and later was appointed as Junior Account Clerk in Rural Works Department. After rendering a long length of service, he superannuated as Accounts Clerk. The respondents settled his pensionary benefits by paying his Government Provident Fund, Group Insurance amount, part of gratuity as per 5th Pay Revision Commission (old scale) and part of leave encashment as per 5th Pay Revision Commission (old scale). The appellant alleged that the respondent did not pay arrear and benefits of first, second and third financial upgradation under Assured Carrier Progression and the arrear of pay revision, gratuity and part of leave encashment as recommended by 6th Pay Revision Commission. And that he stands on equal footing with one of his colleague, Saryug Prasad, as when he approached the Court, the same was allowed and the respondent was directed to pay benefits of financial upgradation. The respondents controverted the claim as appellant did not pass a departmental examination which is mandatory and as such the case of this appellant is not similar to the case of Saryug Prasad. Moreover, after attaining the age of 50, the appellant did not approach his controlling officer for issuance of an order of waiver while he was in service.

The Court after considering the material facts and the papers attached therewith held that it was clear that the appellant did not pass the mandatory test which was a prerequisite. The Court relied on the case of U.P. Jal Nigam v. Jaswant Singh, (2006) 11 SCC 464 where the Court held that “…When a person who is not vigilant of his rights and acquiesces with this situation, can his writ petition be heard after a couple of years on the ground that same relief should be granted to him as was granted to persons similarly situated who was vigilant about his rights and challenged his retirement…”.

In such view of the matter, the Court held that no relief could be granted to the appellant.[Birendra Kumar Sinha v. State of Jharkhand, 2019 SCC OnLine Jhar 432, decided on 23-04-2019]

Patna High Court
Case BriefsHigh Courts

Patna High Court: The Bench of Ahsanuddin Amanullah, J., allowed the writ petition filed with a prayer of expeditious disposal on the grounds that delay was being caused by the respondent in examining the witnesses and this was coming in the way of consideration of petitioner’s superannuation that was to be done taking into account his age.

The facts of the case were that the petitioner was working in place of his brother who died in 1988. He continued to work without any complaint but suddenly in the year 1994, on a complaint, a full-fledged departmental enquiry was held by the Railways in which he was ultimately exonerated. It was submitted that thereafter again complaint was made in 2013, for the same charges and on the one hand departmental proceedings were initiated and on the other hand, a criminal case was also instituted. In this criminal case, it was submitted that it was the authorities who were not cooperating as witnesses are not being examined on behalf of the prosecution. This would cause a delay in the superannuation which was due within a few weeks as the criminal case would come in the way of consideration. The prayer was to expedite and conclude the trial at the earliest.

The Court allowed the petition finding prayer to be reasonable. [Hoti Rai v. State of Bihar, 2019 SCC OnLine Pat 307, Order dated 08-03-2019]

Case BriefsHigh Courts

Himachal Pradesh High Court: The Bench of Tarlok Singh Chauhan, J. dismissed a petition being devoid of merit and also finding a gross abuse of process of the Court.

In the pertinent case the petitioner after his retirement from the service, filed for correction of his date of birth in the official order. The petitioner originally worked under the administrative control of Beas Control Board (BCB) where at the time of joining he got recorded his date of birth as 15-04-1950. The cases referred to by the Court were Bharat Coking Coal Ltd. v. Chhota Birsa Uranw, (2014) 12 SCC 570 and Union of India v. Harnam Singh, (1993) 2 SCC 162 wherein the issue was expressly dealt with. The petitioner in return produced his school leaving certificate, where the date of birth according to him was 15-4-1954 and not 15-4-1950.

The Court noted certain material facts:

– if the date of birth was 15-04-1954 and not 15-4-1950, as is being vehemently claimed by the petitioner, then it is impossible to fathom as to how his services could have been engaged by BCB at the age of about 15 years and he being minor at that time, under no circumstances, he could have been legally appointed.

-the petitioner, while in service of BCB, did not take any steps  whatsoever to get his date of birth corrected and the reason for the same is obvious because in case his service record would have been corrected on the basis of date of birth, then obviously his services were bound to be terminated being a minor.

-after attaining the age of superannuation on completion of 55 years, was granted three successive continuations and even during this period, he did not object to the date of birth.

The Court found this to be normally a fit case where the criminal prosecution should have been ordered against the petitioner for tampering with the official record, however, it refrained from passing any order to this effect taking into consideration that the petitioner has not only retired from service of the respondents, but is currently a senior citizen of about 65 years of age. Thus the petition was dismissed.[Dhani Ram v. Bhakra Beas Management Board, 2019 SCC OnLine HP 251, decided on 05-03-2019]

Patna High Court
Case BriefsHigh Courts

Patna High Court: A Single Judge Bench comprising of Shivaji Pandey, J. dismissed a writ petition for transfer owing to financial inconvenience and remaining superannuation period of the petitioner.

In this case, the petitioner through his counsel Kedar Jha has challenged his transfer order wherein it was stated that the petitioner has worked at Darbhanga for a very long time and now the respondents want to uproot him and plant him at Patna thereby causing great financial inconvenience to him as the cost of living was higher which would cause difficulties in running his families. It was also added that as per policy of the authorities class-III employees shall be treated as District Cadre Level employees in order to erode their difficulties.

The Court was of the view that it does not stand to the reason as to why the petitioner has been sent to Patna and thus Darbhanga district was convenient for the petitioner. Further as more than a year was left for his superannuation and that allows him to be given the choice of his workplace. Accordingly, this writ petition was allowed.[Wasi Ahmad v. State of Bihar, 2018 SCC OnLine Pat 2269, decided on 21-12-2018]

Case BriefsSupreme Court

Supreme Court: A full court, speaking through A.M. Khanwilkar, J. for himself and Dipak Misra, CJ and Dr. D.Y.  Chandrachud, dismissed an appeal filed by the Kerala Assistant Public Prosecutors Association against the decision of Kerala High Court which rejected the claim of the members of appellant association to be treated at par with Public Prosecutors in the matter of age of superannuation.

The appellant association claimed that the Assistant Public Prosecutors (APPs) who are officers of law courts should be treated at parity with Public Prosecutors in the matter of retirement age. It is worth noting that age of retirement of APPs appointed before 31st March 2013, is 56 years, while retirement age of Public Prosecutors is 60 years. Their claim was rejected by the Kerala High Court and therefore appeal was filed before the Apex Court.

The Hon’ble Supreme Court cogitated over the rival submissions of the parties and found no infirmity in the conclusion arrived at by the High Court. The concerned APPs are appointed on the advice of Kerala Public Service Commission, after clearing competitive examination. Whereas, Public Prosecutors are appointed by the Government under Kerala Government Law Officers (Appointment and Conditions of Service) and Conduct of Cases Rules 1978. Their method of appointment and conditions of service are different. The APPs are like any other government servants while the Public Prosecutors, appointed for a period of three years, are not government employees and do not enjoy service benefits like APPs. The Court held that merely because they perform similar functions, the APPs cannot be considered at par with Public Prosecutors to make provision for same retirement age. However, APPs were given liberty to approach the State Government to represent the alternatives as suggested by them. [Kerala Assistant Public Prosecutors Association v. State of Kerala, 2018 SCC OnLine 551, dated 17.05.2018]

Case BriefsHigh Courts

Bombay High Court: Order passed by the respondent, reducing the basic pay of the petitioner retrospectively after her superannuation, was set aside by a Division Bench comprising of B.R. Gavai and Bharati. H. Dangre, JJ.

The petitioner challenged the recovery of a certain sum on account of reduction in pay scale, ordered by the respondent. The petitioner was appointed as an Assistant Trained Teacher in 1970. She attained superannuation in 2010. The impugned order was passed in 2011 by the respondent on the ground that the basic pay was reduced as per the qualifications of the petitioner.

The High Court perused the record and found that the impugned order was passed after 18 months of petitioner’s retirement. The Court, referring to the judgment of the Supreme Court in Sayed Abdul Qadir v. State of Bihar, (2009) 3 SCC 475, held that such a recovery at the far end of the career of an employee or after his superannuation was not permissible in law. Similarly, the impugned order of the respondent reducing basic pay of the petitioner was also found unsustainable. Accordingly, the impugned order was set aside and the petition was allowed. [Grace George Pampoorickal v. Municipal Corporation of Greater Mumbai, 2018 SCC OnLine Bom 1037, dated 20-4-2018]