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CASE NO.: Appeal (civil)  4638 of 2006

PETITIONER: State of U.P. & Ors.                                             

RESPONDENT: Harihar Bhole Nath                                               

DATE OF JUDGMENT: 01/11/2006

BENCH: S.B. Sinha & Markandey Katju

JUDGMENT: J U D G M E N T (Arising out of S.L.P. (C) No.2980/2006)

S.B. Sinha, J.

       Leave granted.

Interpretation and application of Regulation 351-A of the Civil  Service Regulations falls for consideration in this appeal which arises out of  a judgment and order dated 29.3.2005 passed by a Division Bench of the  High Court of Judicature at Allahabad, Lucknow Bench at Lucknow  allowing the Writ Petition No.435 of 2002 filed by Respondent herein.   The basic fact of the matter is not in dispute.  Respondent was  appointed as a Clerk.  He rose up to the position of Deputy Inspector  General of Registration.  He was charged with commission of misconduct  involving gross irregularities while he was posted at Faizabad on  preliminary enquiry by the then Inspector General of Registration, pursuant  whereto and in furtherance whereof a charge-sheet dated 22.3.1993 was  served on him on 24.3.1993, and an Enquiry Officer was appointed, stating :

"O.M.No.S.R.1605/11-93-312(58)/93 dtd.24th March, 1993 issued by the Special Secretary to the Government of Uttar  Pradesh

Government of Uttar Pradesh Finance (Stamp and  Registration), Section No.S.R.1605/11-93-312(58)/93

Lucknow : The 24th of March, 1993   (Issued on 24.3.1993)

Office Memorandum

Whereas on the charge of dereliction of duty indulging  in irregularity and causing financial loss to the  (Government) revenue, an enquiry against Shri Harihar  Bhole Nath Misra, Deputy Inspector General of  Registration, Faizabad Division and whereas Shri  Harihar Bholenath Mishra is expected that he will  submit his written explanation, in his defence, to the  charge/charges.

2.  Now, therefore, his Excellency the Governor is pleased  to appoint the Inspector General of Registration as  Enquiry Officer, for conducting the enquiry against Shri  Harihar Bholenath Misra. 3.      The aforesaid officer Shri Harihar Bholenath Misra will  submit his written explanation, in his defence, to the  Enquiry Officer, within the period prescribed by the

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said Enquiry Officer.

4.      The Enquiry Officer will conduct an open enquiry  wherein the delinquent/charged officer.  Will, if he so  desires, be afforded an opportunity for his hearing in  person, and the delinquent/charged officer will be given  an opportunity to cross-examine the witnesses  examined in support of the charge and also to produce  witnesses in his defence.  In this regard, the procedure  contained in Rule 55 of the Civil Service (Classifica- tion, Control and Appeal) Rules and the procedure  notified by two Government of Uttar Pradesh, will be  followed.

5.      On the completion of the enquiring, the Enquiry  Officer, shall improve the enquiry report under  aforesaid Rule 55.

6.      The enquiry officer will complete the enquiry Report as  expeditiously as possible and submit the same.

7.      Shri Harihar Bholenath Mishra is hereby informed that  he will appear in person, before the Enquiry Officer on  the date prescribed or the hearing and comply with the  directions given in respect of the said enquiry and  submit his any prayer in respect of the enquiry before  the enquiry officer and the enquiry officer shall dispose  of the same in accordance with the rules.                                                              By the order of the Governor                                                           Sd/-                                                        Sushil Chand Tripathi                                                                      Secretary"  

       He was placed under suspension by on or about 24.3.1993 under the  orders of the Governor.   

       On a writ petition filed by Respondent questioning the legality of the  said order of suspension, the High Court by its order dated 30.3.1993 stayed  the operation thereof.  During pendency of the said writ petition, Respondent  retired from services on 31.3.1993. Departmental Enquiry, however, was  commenced on 4.1.1997.  A report was submitted by the Enquiry Officer,  pursuant whereto or in furtherance whereof the competent Authority issued  the second show cause notice on 19.11.1998.  Respondent, however, instead  of submitting his reply, demanded certain documents at that stage.  As he did  not submit any reply, a decision was taken by the competent Authority on  11.11.1999 in consultation with the U.P. Public Service Commission  (UPPSC) to recover the amount of the monetary loss caused to the  Government Exchequer by reason of various acts of omissions and  commissions on his part, wherefor a punishment of recovery of a sum of  Rs.7,02,279.50p. was awarded on 7.1.2000.  The said amount was directed  to be recovered from the amount of gratuity and pension payable to him as  also from the moveable and immovable assets of Respondent.   

       A writ petition came to be filed by Respondent questioning the said  order of recovery dated 7.1.2000, which was dismissed by an order dated  19.7.2000 on the ground of availability of an alternative remedy.  He filed an  original application before the U.P. State Public Services Tribunal, which by  reason of an order dated 18.1.2002 was dismissed.  A writ petition  questioning the said order of the Tribunal was filed by Respondent in the  High Court of Judicature at Allahabad in March 2002, which was registered  as Writ Petition No.435/2002.  The respondent made the following prayers  therein :

a)      To issue a writ, order or direction in the nature of

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certiorari quashing the impugned order dtd.  7.01.2000 passed by the Opp-party 2, contained in  Annexure-8 to the writ petition.

b)      To issue a writ, order or direction in the nature of  certiorari quashing the impugned judgment and  order dated 18.01.2002 passed by the learned State  Public Services Tribunal, the true copy of which is  contained as Annexure-1 to the writ petition.

c)      To issue a writ, order or direction in the nature of  mandamus commanding the opp-parties to release  the pension of the petitioner, commutation of  pension, gratuity, leave encashment of 10 months,  10% amount of O.P. Funds, salary for the month of  February and March, 1993 and pension for the  month of April, 1993 alongwith the 18% compound  interest on all above mentioned arrears of amount."

       In its counter affidavit, Appellants contended that the order dated  7.1.2000 impugned therein was passed after obtaining prior approval of the  Governor of Uttar Pradesh as also the U.P. Pubic Service Commission  following the normal practice prevalent in the State and in terms of the  Conduct of Business Rules.       

       By reason of the impugned judgment and order, the High Court  allowed the writ petition of Respondent holding that before a departmental  proceeding against a Government servant after his retirement is initiated, it  was obligatory on the part of Appellants to obtain sanction of the Governor.   Requirement to obtain such sanction, it was opined, was also necessary for  continuance of the disciplinary proceedings after superannuation of an  employee even in a case where such proceedings had been initiated prior to  his superannuation.   

       Appellants are, thus, before us.

       A departmental proceeding can be initiated for recovery of amount  suffered by the State Exchequer owing to the acts of omission or  commission of a delinquent employee in three different situations :

       i)      When a disciplinary proceeding is initiated and concluded  against a delinquent employee before he reaches his age of superannuation;         ii)     When a proceeding is initiated before the delinquent officer  reached his age of superannuation but the same has not been concluded and  despite superannuation of the employee, an order of recovery of the amount  from the pension and gratuity is passed; and         iii)    An enquiry is initiated after the delinquent employee reaches  his age of superannuation.

       Civil Service Regulations are framed in terms of the proviso appended  to Article 309 of the Constitution of India.  Regulations 351-A and 470 of  the Civil Service Regulations take care of the situation leading to recovery  of the amount suffered by the Government from the amount of pension and  gratuity payable to a delinquent employee when he is found guilty of  commission of misconduct or negligence causing pecuniary loss to the  Government.  The said provisions read as under :

"351-A. The Governor reserves to himself the right of  withholding or withdrawing a pension or any part of it,  whether permanently or for a specified period and the  right of ordering the recovery from a pension of the  whole or part of any pecuniary loss caused to  Government, if the pensioner is found in departmental or  judicial proceedings to have been guilty of grave  misconduct, or to have caused pecuniary loss to

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Government by misconduct or negligence, during his  service, including service rendered on re-employment  after retirement: Provided that \027  (a)     Such departmental proceedings, if not instituted  while the officer was on duty either before  retirement or during reemployment \026 i)      shall not be instituted save with the sanction  of the Governor. ii)     shall be in respect of an event which took  place not more than four years before the  institution of such proceedings; and  iii)    shall be conducted by such authority and in  such place or places as the Governor may  direct and in accordance with the procedure  applicable to proceedings on which an order  of dismissal from service may be made. (b)     Judicial proceedings, if not instituted while the  officer was on duty either before retirement or  during re-employment, shall have been instituted  in accordance with sub-clause(ii) of clause (a); and  (c)     The Public Service commission, UP shall be  consulted before final orders are passed.

(Provided further that if the order passed by the Governor  relates to a case dealt with under the Uttar Pradesh  Disciplinary Proceedings (Administrative Tribunal)  Rules, 1947, it shall not be necessary to consult Public  Service Commission.)  

Explanation \026 For the purpose of this article \026 (a)     departmental proceedings shall be deemed to have  been instituted when the charges framed against  the pensioner are issued to him or, if the officer  has been placed under suspension from an earlier  date, on such date; and  (b)     judicial proceedings shall be deemed to have been  instituted : (i)     in the case of criminal proceedings, on the  date on which complaint is made, or a  charge-sheet is submitted, to a criminal  court; and (ii)    in the case of civil proceedings, on the date  on which the plaint is presented or, as the  case may be, an application is made to a  Civil Court."    

"470.  (a) The full pension admissible under the Rules is  not to be given as a matter of course, or unless the service  rendered has been really approved (See Appendix 9)           (b) If the service has not been thoroughly  satisfactory the authority sanctioning the pension should  make such reduction in the amount as it thinks proper. Provided that in cases where the authority sanctioning  pension is other than the appointing authority, no order  regarding reduction in the amount of pension shall be  made without the approval of the appointing authority. Note: For the purpose of this Article ’appointing  authority’ shall mean the authority which is competent to  make substantive appointment to the post or service from  which the officer concerned retires."    

It is not in dispute that Respondent was placed under suspension  before he reached his age of superannuation.  A departmental proceeding  was not only initiated against him, but an Enquiry Officer was also

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appointed.  The order of suspension, however, remained stayed by a judicial  order.  But the same paled into insignificance once the employee reached the  age of superannuation.  By reason of the same, however, the legal fiction  created in regard to the point of time when the enquiry proceeding would be  deemed to have commenced was not effaced.   

Thus, only because the enquiry proceeding was actually stared after  superannuation of Respondent, the same would not mean the enquiry  proceeding had not been initiated.  The right to initiate proceedings which  would include a right to continue the proceedings was with the Governor.   Sanction of the Governor is required to be obtained when proceedings are  initiated by an Authority other than the Governor.   

The proceedings for recovery of the amount from a Government  servant can be passed in the event he is held to be guilty of grave misconduct  or caused pecuniary loss to Government by his misconduct or negligence  during his service.  Some procedural safeguards, however, have been laid  down in terms of proviso appended thereto, including the requirement to  obtain an order of sanction of the Governor.  Such order of sanction,  however, would not be necessary if the departmental proceedings have been  initiated while the delinquent was on duty.  Proviso appended to Regulation  351-A merely controls the main proceedings.  The same would apply in the  exigencies of the situation envisaged therein, namely, even the proceedings  were initiated after retirement and nor prior thereto.   

Explanation appended to Regulation 351-A provides for a legal fiction  in terms whereof departmental proceedings would be deemed to have been  instituted when the charges are framed against the pensioner or issued or the  delinquent has been placed under suspension from an earlier date, on such  date.  

Regulation 470 of the Civil Service Regulations also provides that  pension is not payable to a Government servant as a matter of course and  may be withheld if the services of the employee have not been thoroughly  satisfactory.

In both the situations, a regular proceeding is required to be initiated  which would include issuance and service of show cause notice and in the  event, cause is shown, application of mind thereupon.  On initiation of  departmental proceedings the principles of natural justice must be complied  with.  In the instant case, the procedures laid down under the statute have  been complied with.  A report was submitted by the Enquiry Officer and  consequent orders have been passed on the basis thereof, in accordance with  the procedure laid down therefor by the disciplinary authority.

The question came up for consideration before this Court in State of  Uttar Pradesh vs. Brahm Datt Sharma & Anr. [AIR 1987 SC 943],  wherein this Court, while interpreting Regulation 470 of the Civil Service  Regulations, held :

"A plain reading of the regulation indicates that full  pension is not awarded as a matter of course to a Govt.  servant on his retirement instead, it is awarded to him if  his satisfactory service is approved. If the service of a  Govt. servant has not been thoroughly satisfactory the  authority competent to sanction the pension is  empowered to make such reduction in the amount of  pension as it may think proper. Proviso to the regulation  lays down that no order regarding reduction in the  amount of pension shall be made without the approval of  the appointing authority. Though the Regulations do not  expressly provide for affording opportunity to the Govt.  Servant before order for the reduction in the pension is  issued, but the principles of natural justice ordain that  opportunity of hearing must be afforded to the Govt.

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servant before any order is passed. Article 311(2) is not  attracted, nonetheless the Govt. servant is entitled to  opportunity of hearing as the order of reduction in  pension affects his right to receive full pension. It is no  more in dispute that pension is not bounty; instead it is a  right to property earned by the Govt. servant on his  rendering satisfactory service to the State."               It was opined that the State is competent to direct reduction in  pension after affording hearing to the Government Servant.   

The High Court has placed strong reliance on State of U.P. & Anr.  vs. Shri Krishna Pandey [AIR 1996 SC 1656], wherein the departmental  enquiry was initiated after the delinquent officer reached his age of  superannuation.  Noticing Rule 351-A of the Civil Services Rules and that  the departmental proceeding was initiated after the retirement of the  employee, the same was held to be impermissible in law.  Although it was  not necessary to pronounce upon the construction of Rule 351-A involving a  case where a departmental proceeding was initiated prior to reaching of the  age of superannuation by the delinquent officer, it was observed that as the  officer had retired on 31st March, 1987 and proceedings were initiated  against him on 12th April, 1991, proviso appended to the Rule would be  applicable.   

The right to withhold or withdraw the pension may arise in different  situations.  Two different contingencies are clearly envisaged under the  Regulations, viz., if the pensioner is found guilty of misconduct either in  departmental proceedings or in judicial proceedings.   Although, prima facie,  the proviso appended to Regulation 351-A does not envisage continuation of  the proceedings, the same must be held to be existing on a plain reading  thereof.  Regulations 351-A and 470 provide for a composite scheme; by  emphasizing that payment of pension is not automatical it can be withheld if  the conditions laid down therein are satisfied.  Undoubtedly, before an order  of withholding the amount of pension or a part thereof it is passed, the  procedures laid down under the statute are required to be complied with.   The procedural safeguards must be kept in mind.  Limitations of application  of the Rules again have to be borne in mind.

But the said Rules read with the Proviso and the Explanation  appended thereto construed in their entirety clearly postulate that the  proceeding initiated before the delinquent officer reached his age of  superannuation would be valid.

The question, however, is whether the sanction of the Governor was  required even for the purpose of continuance of the proceedings which had  already been initiated.  Answer thereto must be rendered in the negative.   The proceedings had not only been initiated by the Governor, the order  impugned in the Writ Petition No.2243/93 was also passed by the Governor,  the relevant portion whereof reads as under :

"\005\005After examining the aforesaid all the charges, since  it is found that all the charges have been proved, hence  his excellency, the Governor of Uttar Pradesh has while  finding Shri Harihar Bhole Nath guilty, decided to punish  him as given below :-

1.      The financial loss to the tune of Rs.7,02,279.50  (Rupees Seven lakhs two thousand and two  hundred seventy nine and paise fifty only) caused  to the State Government by his irregular acts he set  off and adjourned against his pension/gratuity  payable to him under 351(A) of the CSR by way of  arrears of government revenue and the remaining  amount be realized from the moveable immovable  property of Shri Harihar Bhole Nath by instituting

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a (civil) suit in a court of law.

2.      The full pension/gratuity payable to Shri Harihar  Bhole Nath be forfeited with immediate effect,  under Article 351(A) of the CSR.  With reference  to the aforesaid decision of the government, prior  to its implementation, the advice of the Public  Service Commission Allahabad has already been  obtained and the Commissioner has concerned  with the aforesaid punishment proposed by the  Government.  Hence Shri Harihar Bhole Nath, the  then Deputy Inspector General of  Registration/Deputy Commissioner (Stamp)  Faizabad is published in accordance with what is  stated hereinabove.                                  By order of his Excellency Governor,                                 Sd/- T.P. Arya (illegible)                                         Principal Secretary"     

         The order was authenticated in terms of Clause (3) of Article 166 of  the Constitution of India, as the proceeding was initiated under the orders of  the Governor and the order of punishment was also passed under the order of  the Governor, no sanction of the Governor was required.

Reliance has also been placed on Bhagirathi Jena vs. Board of  Directors, O.S.F.C. & Ors. [(1999) 3 SCC 666], wherein this Court was  concerned with interpretation of Regulation 17 of the Orissa State Financial  Corporation Employees’ Provident Fund Regulations, 1959.   

This Court noticed the relevant Regulations and opined that therein no  specific provision existed for deducting any amount from the provident fund  consequent to any misconduct determined in departmental enquiry, nor was  there any provision for continuance of departmental enquiry after  superannuation.  It was in the aforementioned situation opined :

"In view of the absence of such a provision in the  abovesaid regulations, it must be held that the  Corporation had no legal authority to make any reduction  in the retiral benefits of the appellant. There is also no  provision for conducting a disciplinary enquiry after  retirement of the appellant and nor any provision stating  that in case misconduct is established, a deduction could  be made from retiral benefits. Once the appellant had  retired from service on 30-6-1995, there was no authority  vested in the Corporation for continuing the departmental  enquiry even for the purpose of imposing any reduction  in the retiral benefits payable to the appellant. In the  absence of such an authority, it must be held that the  enquiry had lapsed and the appellant was entitled to full  retiral benefits on retirement."

        Such is not the position herein.  We are, therefore, of the opinion that  the impugned judgment cannot be sustained, which is set aside accordingly.   The appeal is allowed.  However, as the other contentions raised by  Respondent have not been determined in the writ petition, the matter is  remitted to the High Court for consideration on the merit in respect of the  other contentions raised by Respondent.   

No costs.