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PETITIONER: STATE OF PUNJAB AND ANR.

       Vs.

RESPONDENT: IQBAL SINGH

DATE OF JUDGMENT12/02/1976

BENCH: SINGH, JASWANT BENCH: SINGH, JASWANT GUPTA, A.C.

CITATION:  1976 AIR  667            1976 SCR  (3) 360  1976 SCC  (2)   1  CITATOR INFO :  R          1983 SC 130  (20)  R          1984 SC1064  (18)  F          1985 SC1196  (7)  R          1987 SC 943  (8)

ACT:      Punjab Civil  Service Rules-r.  6.4-Retired  Government servant-Pension and death-cum-retirement gratuity reduced by Government  on   the  ground   that   service   record   not satisfactory-Pension if  a bounty  paid  by  Government-  If property under  Arts 31(1) and 19(1)(f) of the Constitution- If reasonable  opportunity of making defence should be given before reducing the pension.      Constitution of India-Att. 311(2)-Applicability of.

HEADNOTE:      Purporting to  act under  r. 6.4  of the  Punjab  Civil Service Rules.  the State imposed a cut of 5 per cent on the pension and death-cum-retirement gratuity of the respondent. who was a retired Government servant, on the ground that his service record  was not satisfactory. The High Court allowed the respondent’s  writ petition  challenging the decision of the Government.      Dismissing the appeal of the State. ^      HELD: The  ground  that  superannuation  pension  is  a bounty and  is given  as an act of grace is not available to the appellant. In Deoki Nandan Prasad v. The State of Bihar, [1971] Supp.  S.C.R. 634, it was held by this Court (1) that pension is  not a  bounty payable  on  the  sweet  will  and pleasure of  the Government  and the  right of  a Government servant to receive it is property under Art. 31 ( 1 ) of the Constitution. and so the State cannot withhold the same by a mere executive  order: and  (2)  the  claim  to  pension  is property under  Art. 19  (1) (f)  of the Constitution and is not saved by cl. (5) of Art. 19. [362C-D]      (2) Though  the impugned  order  imposing  the  cut  in pension and gratuity is not one of reduction in rank falling within the purview of Art. 311(2), yet there can be no doubt that it  adversely affected the respondent and such an order could not  have been  passed without giving him a reasonable opportunity of making his defence. [362G]

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    State of  Punjab v.  K. R..  Erry &  Sobhag  Rai  Mehta [19731 2 S.C.R. 405, applied.      (3) M.  Narasimachar v.  The State  of Mysore  [1960] 1 S.C.R. 981,  is inapplicable  to this case because the point as to  whether an  opportunity  to  show  cause  was  to  be afforded to a retired Government servant before applying the cut in  his pension  in view  of the  principle  of  natural justice of  audi alteram partem was never urged or gone into in that  case, nor  was the  question whether  pension was a bounty or property arose in that case. [364 D-E]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 1203 of 1968.      From the  order dated  the 4-4-1967  of the  Punjab and Haryana High Court in L.P.A. No. 104 of 1967.      O. P. Sharma, for the appellant.      H. K. Puri and M. C. Dhingra, for the respondent.      The Judgment of the Court was delivered by      JASWANT SINGH, J.-This appeal by certificate of fitness granted by  the Punjab  and Haryana  High Court  is directed against the judgment dated April 4, 1967 of a Division Bench of that  Court passed  in Letters  Patent Appeal  No. 104 of 1967 whereby  the judgment and order dated December 19, 1966 of Narula, J. (as he then was) in Civil Writ Petition No 298 of 1966 was affirmed. 361 It appears that the respondent joined the Punjab Education A Department (Class  II)  Service  by  direct  recruitment  as senior lecturer in 1933. He was promoted to Punjab Education Service (Class  l) on  October 1,  1949. He  was  given  the selection grade  with effect  from February  15, 1956 and in due course  rose to  the  position  of  Director  of  Public Instruction-cum-Secretary  to   the  Government  of  Punjab, Education Department.  He proceeded  on leave preparatory to retirement on March 18, 1958, on attaining the age of super- annuation. In  June; 1961,  he received a copy of letter No. 5137-ED-I-60/9269  dated   May  2,  1961  addressed  by  the Secretary to Government, Punjab, Education Department to the Director  of   Public   Instruction,   Punjab,   Chandigarh, conveying the  sanction of  the Governor  of Punjab  to  the grant to  him i.e.  the respondent of superannuation pension and death-cun1-retirement  gratuity of  Rs. 417.02  np.  per mensem and  Rs. 17,030.25  np in lump sum respectively under rules 5.27  and 6.13 of the Punjab Civil Service Rules, Vol. II read  with para  9(1) (a) of the New Pension Rules, 1951. It was  stated in the aforesaid letter that personal file of the respondent  had been examined with reference to rule 6.4 of the  Punjab Civil  Service Rules,  Vol. II and Government were satisfied  that his service record was not satisfactory and a  cut of 10% had accordingly been made in the amount of pension and death-cum-retirement gratuity admissible to his. On   January,    28,   1962,    the   respondent   submitted representations to the Chief Minister and Governor of Punjab against the  aforesaid decision  of the  Government to apply 10% cut  in his  pension and  death-cum-retirenment gratuity but the same proved abortive. After the establishment of the Board set  up to  examine and  remove the  grievances in the matters of  promotion and  fixation of  pension etc.  Of the Gazetted  officers   of  the   Government,  the   respondent addressed a  representation to  the said  Board on September 14, 1964,  against the. aforesaid decision of the Government to apply  a cut  of l0%  in his  pension  and  gratuity.  On

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November l  . 1965, the respondent received a copy of letter No. EDI-4(64)-65/22436  dated October 21, 1965, addressed by the Education  Commissioner  and  Secretary  to  Government, Punjab, Education  Department, to  the  Director  of  Public Instruction, Punjab,  intimating that in supersession of the aforesaid letter dated May 2, 1961 of the Punjab Government, it  had   been  decided   to  grant   to  the  respondent  a superannuation pension  and death-cum-retirement gratuity of Rs. 440.18  np per  mensem and  Rs. 18,927.50 np in lump sum respectively under  rules 5.27  and 6.13 of the Punjab Civil Service Rules,  Vol. II  read with  para 9(i) (a) of the New Pension Rules,  1951. In  para  3  of  the  letter,  it  was reiterated that  a cut  of 5%  had been  made in the pension admissible to the respondent as his service record which had been examined with reference to rule 6.4 of the Punjab Civil Service Rules,  Vol. II had not been satisfactory. Aggrieved by this  communication, the  respondent filed  in the Punjab and Haryana  High  Court  at  Chandigarh  a  petition  under Articles 226  and 227  of the Constitution, being Civil Writ Petition No. 298 of 1966, challenging the aforesaid decision of the  Punjab Government  which  was,  as  already  stated, allowed by  Narula, J. r(as he then was) by his judgment and order dated  December 19,  1966, following  the  Full  Bench Judgment of his Court dated October 362 25,1966,in Civil Writ Petition No. 504 of 1954 entitled Shri K. R.  Erry, Retired.  Superintending  Engineer,  45,  Cecil Hotel, Simla  v. . The State of Punjab(l). Dissatisfied with this judgment  and order, the appellants preferred a Letters Patent Appeal,  being L. P. A. No. 104 of 1967 which did not meet with  success. Thereupon  the appellants  applied for a certificate under  Article 133 of the Constitution which was granted to them. This is how the matter is before us.      Although in the grounds of appeal, it has been urged by the appeIlants  that the  Full Bench  decision of  the  High Court of  Punjab and Haryana in K. R. Erry’s(l) case (supra) is not in accordance with law as superannuation pension is a bounty and  is given only as an act of grace, that ground is no longer  available  to  the  appellants  in  view  of  the decision of this Court in Deokinandan Prasad v. The state of Bihar &  Ors. (2)  where it  was held  that pension is not a bounty payable  on  the  sweet  will  and  pleasure  of  the Government and  the right of a Government servant to receive it is  property under  Article 31(1) of the Constitution and the State  cannot withhold  the same  by  a  mere  executive order. It  was further  held in  that case that the claim to pension was  also property  under Article  19(1) (f)  of the Constitution and  was not  saved by  clause (S) thereof. The learned counsel  appearing for  the appellants has, however, made a  feeble attempt  to urge  that no opportunity to show cause was  required to  be given  to the  respondent  before passing the  order imposing  the cut  in his  superannuation pension and  death-cum-retirement gratuity under clauses (a) and (b)  of rule  6.4 of  the  Punjab  Civil  Service  Rules (Pension Rules),  as the  order was  an administrative order and the  case did not fall within the purview of Article 311 (2) of  the Constitution.  It has  been further contended by learned counsel  for the appellants that it was the judgment of this  Court in M. Narasimachar v. The State of Mysore(8), and not  the judgment in State of Punjab v. The K. R..Erry & Sobhag Rai  Mehta(4) which  governed the  present  case.  We regret we are unable to accede to these contentions.      Though the  impugned order  imposing cut in pension and gratuity is  not one of reduction in rank falling within the purview of Article 311 (2) yet there can be no doubt that it

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adversely affected  the respondent  and such  an order could not  have  been  passed  without  giving  him  a  reasonable opportunity of  making his  defence.  Reference  r  in  this connection may  be made  with advantage  to the  decision of this Court  in K.  R. Erry & Sobhag Rai Mehta’s case (supra) where after  an exhaustive review of the case law bearing on the point, it was observed at page 413 as follows:- -           "Where a body or authority is judicial or where it      has to  determine a  matter involving rights judicially      because of  express or implied provision, the principle      of natural  justice audi  alteram partem  applies. See:      Province of  Bombay, v. Kusaldas S. Advani & Ors. [1950      S.C.R.  621   (725),  and   Board  of   High  School  &      Intermediate Education, U.P.      (1) I.L.R. (1917) Punjab & Haryana 278.      (2) [1971]                                            Supp. S.C.R. 634.      (3) [1960] I S.C.R. 981: A.I.R. 1960 S.C. 247.      (4)                                         [1973] 2 S.C.R. 405. 363 ALLahabad v.  Ghanshyam Das Gupta & ors. (1962) Suppl. A (3) S.C.R.  36.]   With  the   profiteration  of  administrative decisions in  the welfare state it is now further recognised by Courts  both in  England and in this country, (especially after the  decision of  House of  Lords in  Ridge v. Baldwin (1964)  A.C.   40  that   where  a   body  or  authority  is characteristically administrative  the principle  of natural justice is also liable to be invoked if the decision of that body or  authority affects,  individual rights or interests, and having  regard to  the particular  situation it would be unfair for  the-body or  authority not  to  have  allowed  a reasonable opportunity to be heard.. See: State of orissa v. Dr. (Miss) Binapani Dei & Ors. [1967) 2 S.C.R. 625 and In re H. K. (An lnfant) [1967] 2 Q.B.D. 617. In the former case it was observed as follows:- C      "An order  by the State to the prejudice of a person in derogation  of  his  vested  rights  may  be  made  only  in accordance with the basic rules of justice and fairplay. The deciding authority,  it is true, is not in the position of a Judge called  upon to  decide an  action between  contesting parties, and  strict compliance  with the  forms of judicial procedure may  not be  insisted upon.  He is however under a duty to  give the  person against whom an enquiry is held an opportunity  to  set  up‘his  version  or  drefence  and  an opportunity to  correct or to controvert any evidence in the possession of  the authority  which is  sought to  be relied upon to  his prejudice.  For that purpose the person against whom an  enquiry is  held must be informed of the case he is called upon to meet and the evidence in support thereof. The rule that a party to whose prejudice an order is intended to be passed is entitled to a hearing applied alike to judicial tribunals and  bodies of  persons invested with authority to adjudicate upon  matters involving civil consequences. It is one of  the fundamental  rules of  our constitutional set up that  every   citizen  is   protected  against  exercise  of arbitrary authority  by the  State or  its officers. Duty to act judicially would therefore arise from the very nature of the function  intended to be performed. It need not be shown to be super-added. If there is power to decide and determine to the  prejudice of  a person,  duty to  act judicially  is implicit in the exercise of such power. If the essentials of justice be ignored and an order to the prejudice of a person is made,  the order is a nullity. That is a basic concept of the rule  of  law  and  importance  thereof  transcends  the significance of a decision in any particular case."      These observations  were  made  with  reference  to  an

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authority which  could be  described  as  characteristically administrative. At page 630 it was observed:           "It is  true that  the order  is administrative in      character,  but  even  an  administrative  order  which      involves civil 364      consequences  as   already   stated,   must   be   made      consistently with  the rules  of natural  justice after      informing the  first respondent  of  the  case  of  the      State, the evidenve in support thereof and after giving      an opportunity  to the  first respondent of being heard      and meeting or explaining the evidence."      "This case  and the English case in re H.K. (An Infant) were spcifically  referred to with approval in a decision of the constitutional  bench of  this Court  in A. K. Kraipak & Ors. etc. v. Union of India & Ors. [1970] l S.C.R. 457".      The decision  of this  Court in  M. Narasimachar’s case (supra) on  which strong  reliance has been placed on behalf of the  appellants is  of no assistance to them as the point as to  whether an  opportunity  to  show  cause  was  to  be afforded to  a Government  servant before  applying a cut in his pension  in view  of the  principle of  natural  justice embodied in  the well  known maxim  audi alteram  partem was never urged or gone into in that case. Furthemore as pointed out by  Palekar, J.  while speaking  for the  Court in K. R. Erry &  Sobhag Rai Mehta’s case (supra) the question whether pension is  a bounty or property did not arise in the former case. The  present case  is, in our , opinion, fully covered by the  judgment of  this Court  in K.  R. Erry  & Sobha Rai Mehta’s case (supra).      For the  foregoing reasons  we are of the view that the impugned judgments  do not  suffer from  any illegality  and were rightly rendered. In the result the appeal fails and is hereby dismissed with costs. P.B.R.                                      Appeal dismissed. 365