1990 (8) TMI 390 - SC - Indian Laws

Entire gratuity and pension otherwise admissible to the appellant was withheld on permanent basis as a measure of punishment through the proceedings dated November 24, 1981 on opting voluntary retirement Held that - Rule 9 of the rules empowers the President only to with hold or withdraw pension permanently or for a specified period in whole or in part or to order recovery of pecuniary loss caused to the State in whole or in part subject to minimum. The employee s right to pension is a statutory fight.The fight to gratuity is also a statutory right. The appellant was not charged with nor was given an opportunity that his gratuity would be withheld as a measure of punishment. No provision of law has been brought to our notice under which, the President is empowered to withhold gratuity as well, after his retirement as a measure of punishment. Therefore, the order to withhold the gratuity as a measure of penalty is obviously illegal and is devoid of jurisdiction. As no finding that appellant did commit grave misconduct as charged for, the exercise of the power is clearly illegal and in excess of jurisdiction as the condition precedent, grave misconduct was not proved. Accordingly the appeal is allowed and the impugned order dated November 24, 1981 is quashed.

Summary

Issues:
1. Jurisdiction to impose penalty of withholding gratuity and pension after voluntary retirement.
2. Definition and application of "grave misconduct" or "negligence" in relation to withholding pension.
3. Validity of withholding gratuity as a measure of punishment.

Analysis:

Issue 1: Jurisdiction to impose penalty of withholding gratuity and pension after voluntary retirement
The appellant argued that after being allowed to retire voluntarily, the authorities lacked jurisdiction to withhold gratuity and pension as a punishment. However, the court held that as per Rule 9(2) of the Rules, disciplinary proceedings initiated during service can continue even after retirement. The President, being the competent authority, can withhold pension and gratuity based on the findings of the proceedings, even after retirement. The court found the proceedings valid and not abated due to voluntary retirement.

Issue 2: Definition and application of "grave misconduct" or "negligence" in relation to withholding pension
The appellant contended that to withhold pension, there must be a finding of "grave misconduct" or "negligence" as per Rule 8(5)(2) of the Rules. The court emphasized the significance of pension as a right earned through service, not a state bounty. It highlighted the social welfare aspect of pension, providing economic security in old age. The court analyzed the definition of "grave misconduct" and the conditions under which pension can be withheld, emphasizing the need for a finding of misconduct or negligence.

Issue 3: Validity of withholding gratuity as a measure of punishment
The court examined the President's power to withhold or withdraw pension and recover pecuniary loss as per Rule 9(1) of the Rules. It noted that the President can withhold pension based on grave misconduct or negligence found in departmental or judicial proceedings. However, the court found that the order withholding gratuity as a penalty was illegal as the appellant was not charged or given an opportunity regarding the withholding of gratuity. The court ruled that without a finding of grave misconduct, the withholding of pension and gratuity was illegal and exceeded jurisdiction.

In conclusion, the court allowed the appeal, quashing the order to withhold gratuity and pension. The judgment emphasized the importance of establishing grave misconduct or negligence before imposing penalties on pension rights earned through dedicated service.