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CASE NO.: Appeal (civil)  2579 of 1998

PETITIONER: State of West Bengal

RESPONDENT: Haresh C. Banerjee & Ors.

DATE OF JUDGMENT: 30/08/2006

BENCH: Y.K. Sabharwal, C.K. Thakker & P.K. Balasubramanyan

JUDGMENT: J U D G M E N T

Y.K. Sabharwal, CJI.

       The validity of Rule 10(1) of the West Bengal Services  (Death-cum-Retirement Benefit) Rules, 1971 [for short ’the  Rules’] is in question in this appeal.  The Rules have been  framed in exercise of power under proviso to Article 309 of  the Constitution of India.  Rule 10(1) provides for  withholding of pension and reads as under : "10. Right of the Governor to  withhold pension in certain cases.\027 (1) The Governor reserves to himself  the right of withholding of 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 a departmental or judicial  proceeding to have been guilty of grave  misconduct or negligence, during the  period of his service, including service  rendered on re-employment after  retirement :         Provided that \026 (a)     such departmental proceeding if  instituted while the officer was in  service, whether before his  retirement or during his re- employment, shall after the final  retirement of the officer, be  deemed to be a proceeding under  this article and shall be continued  and concluded by the authority  by which it was commenced in  the same manner as if the officer  had continued in service; (b)     such departmental proceedings, if  not instituted while the officer  was in service, whether before his  retirement or during his re- employment\027 (i)     shall not be instituted save  with the sanction of the  Governor; (ii)    shall not be in respect of any  event which took place more

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than four years before such  institution; and (iii)   shall be conducted by such  authority and in such place  as the Governor may direct  and in accordance with the  procedure applicable to  departmental proceedings in  which an order of dismissal  from service could be made  in relation to the officer  during his service; (c)     no such judicial proceeding, if not  instituted while the officer was in  service, whether before his  retirement or during his re- employment shall be instituted in  respect of a cause of action which  arose on an event which took  place more than four years before  such institution; and (d)     the Public Service Commission,  West Bengal, shall be consulted  before final orders are passed. Explanation.\027For the purpose of this  article\027  (a)    a departmental proceeding shall  be deemed to have been instituted  on the date on which the  statement of charges is issued to  the officer or pensioner, or if the  officer has been placed under  suspension from an earlier date,  on such date; and (b)     a judicial proceeding shall be  deemed to have been instituted\027 (i)     in the case of criminal  proceeding, on the date on  which the complaint or  report of police officer, on  which the Magistrate takes  cognizance, is made, and (ii)    in the case of a civil  proceeding, on the date on  which the plaint is presented  or, as the case may be, an  application is made to a Civil  Court."  

While granting leave to examine the vires of Rule 10(1),  it was directed that even if the appeal succeeds, the benefit  available to respondent No. 1 as per the judgment of the  High Court will not be recalled.         The High Court by the impugned judgment has held  Rule 10(1) to be ultra vires the provisions of Articles 19(1)(f)  and 31(1) of the Constitution.  It was held that the pension  was a property and its payment does not depend upon the  discretion of the Government.         Pension is not a bounty payable on the sweet-will and  the pleasure of the Government and to receive pension is a  valuable right of a Government servant is a well-settled legal  proposition.  The question in the present case, however, is  not about the deprivation of the said right by the  Government by an executive order but is about the  constitutional validity of Rule 10(1) providing for

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withholding of pension or part thereof in certain cases.         Articles 19(1)(f) and 31(1) have been repealed by the  Constitution (Forty-Fourth Amendment) Act, 1978 w.e.f.  20th June, 1979.  The right to property is no longer a  fundamental right.  It is now a constitutional right, as  provided in Article 300A of the Constitution.  Right to  receive pension was a fundamental right at the time of  framing of Rules in 1971. The question is whether a Rule  framed under proviso to Article 309 of the Constitution  providing for withholding of the pension would ipso facto be  ultra vires, being violative of Article 19(1)(f) as it stood in  1971 when Rules were framed.         The High Court has, in the impugned judgment, made  reference to a decision of this Court in Deokinandan  Prasad v. The State of Bihar and Ors. [(1971) 2 SCC  330]  for coming to the conclusion that the rule in question  is ultra vires.  In the said case, this Court held that the right  to receive pension was wrongly withheld by an executive  order.  The Judgment in Deokinandan Prasad’s case in  fact lends support to the vires of the rule since it was held  in that case that an employee can be deprived of the  pension by an authority of law.  That authority, in the  present case, is contained in the rules [Rule 10(1)], that  were framed providing for withholding of the pension.         Various State Rules or Regulations vest power for  withholding or reduction of pension on compliance of  principles of natural justice.  The question of an order  withholding or reducing pension being invalid and bad in  law on a legally permissible ground is one thing but to hold  the rule ultra vires is another.  In State of Uttar Pradesh  v. Brahm Datt Sharma and Anr. [(1987) 2 SCC 179], this  Court observed that if the Government incurs pecuniary  loss on account of misconduct or negligence of a  Government servant and if he retires from service before any  departmental proceedings are taken against him, it is open  to the State Government to initiate departmental  proceedings, and if in those proceedings, he is found guilty  of misconduct, negligence or any other such act or omission  as a result of which Government is put to pecuniary loss,  the State Government is entitled to withhold, reduce or  recover the loss suffered by it by forfeiture or reduction of  pension.  In State of Punjab v. K.R. Erry [(1973) 1 SCC  120], it was held that the State Government could not direct  cut in pension of officers without giving a reasonable  opportunity of hearing.  In State of Maharashtra v. M.H.  Mazumdar [(1988) 2 SCC 52], it was observed that the  State Government’s power to reduce or withhold pension by  taking proceedings against a Government servant, even  after his retirement is expressly preserved by the rules.         Rule 10(1) is the authority of law under which the  pension could be withheld on compliance of stipulations of  the rule.  We are unable to appreciate how such a rule could  be held ultra vires even at a point of time when pension was  a property to which Article 19(1)(f) was applicable.         In view of the above, we set aside the impugned  judgment to the extent it declares Rule 10(1) ultra vires.   The appeal is allowed accordingly.