The High Court held that without a specific provision in the service rules, disciplinary enquiries cannot continue after retirement, and withholding terminal benefits is not an enforceable penalty.
Respondent directed to release due pay, allowances, gratuity, CPF/pension, and leave encasement benefits along with 9% interest from the due date.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
S.B. Civil Writ Petition No. 4023 / 2004
Dr. N.M. Khandelwal S/o Sh. S.N. Khandelwal, 13/592, Agra Gate, Ajmer (Rajasthan)
----Petitioner
Versus
----Respondents
For Petitioner(s) : Mr. C. P. Sharma
For Respondent(s) : Mr. R. A. Katta
HON'BLE MR. JUSTICE VEERENDR SINGH SIRADHANA Order
07/04/2017
The petitioner aggrieved of denial of due amount of pay and allowances, gratuity, contributory provident fund (CPF)/pension, leave encasement benefit, subsequent to his retirement attaining the age of superannuation on 25th October, 2002; has instituted the present writ application praying for the following reliefs:
“(a) That it may kindly be declared by appropriate writ, order, direction respondents be directed to drop the departmental enquiry initiated/continued against the petitioner.
(b) That by appropriate order, writ, direction, instructions respondents be directed to allow/release the due amount of pay & allowance, Gratuity, CPF/Pension and leave encasement benefit to the petitioner.
(c) That by appropriate order, directions, instructions respondents be directed to allow the interest also on arrears pay & allowances, amount of gratuity, CPF/Pension and leave encasement benefit w.e.f. 1.12.2002 @ 18% per
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annum.
(d) That any other appropriate writ, order or direction which may be considered just and proper in the circumstances of the case may kindly be issued in favour of the petitioner.
(e) Cost of writ petition be allowed to the humble petitioner.”
Briefly, the essential skeletal materials facts necessary for appreciation of the controversy raised are that the petitioner was appointed as Professor of Management Studies vide order dated 6th December, 1995, in the respondent-University. It is pleaded case of the petitioner that on 25th October, 2002, with an object to cause mental and physical torture so also to financial loss to the petitioner with oblique motives, the petitioner was served with order dated 24th October, 2002, along with statement of allegations for departmental enquiry, on the day of retirement i.e. 25th October, 2002. The petitioner was called upon to submit his written statement of defence within 15 days from the date of receipt of communication/memorandum dated 24th October, 2002.
Mr. C. P. Sharma, learned counsel for the petitioner has assailed the action of the respondent-University mainly on two legal grounds. Firstly, the petitioner could not have been proceeded with enquiry proceedings under the Conduct and Disciplinary Rules, 1998 (for short “Rules of 1998”) of the respondent-University; for according to learned counsel under the Rules of 1998, there is no provision to continue an enquiry after retirement of the petitioner on attaining the age of superannuation i.e. 25th October, 2002. Secondly, under the Rules of 1998, the penalties as contemplated under Rule 11 specifically provide for
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minor and/or major penalties, that may be imposed upon a University employee for good and sufficient reasons. For the petitioner’s due amount of pay and allowances, gratuity, CPF/pension and leave encasement benefit have been withheld, which is not a penalty as contemplated under Rule 11; therefore, the action of the respondent-University is illegal, arbitrary and contrary to the law declared by the Supreme Court as well as by this Court. In support of his stand, he has relied upon the opinion of the Supreme Court in the case of Bhagirathi Jena Vs. Board of Directors, O. S. F. C. and Ors.: AIR 1999 SC 1841, Dev Prakash Tewari Vs. U. P. Cooperative Institutional Service Board, Lucknow & Ors. : 2014 (7) SCC 260, Dr. R. B. Agnihotri Vs. State of U. P.: 2000 All. LJ 1719, UCO Bank & Anr. Vs. Rajinder Lal Capoo r: 2008 5 SCC 257 and opinion of the Coordinate Bench of this Court in the case of Ram Bux Singh Vs. RSRTC & Anr.: SBCWP No. 12921/2008, decided on 11th February, 2014.
Per contra ; Mr. R. A. Katta, learned counsel appearing for the respondent-University, while supporting the action of the respondent-University in withholding the terminal benefits of the petitioner and reiterating the stand in the counter affidavit, vehemently argued that though there may not be a specific provision under the Rules of 1998. However, the petitioner was rightly proceeded with for gross misconduct with memorandum/charge-sheet dated 24th October, 2002, which was served to the petitioner on 25th October, 2002. Further, such an enquiry can be continued in the backdrop of what has been
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observed by the Supreme Court in the case of Union of India & Ors. Vs. M. Bhaskaran : 1995 Supp. (4) SCC 100.
Learned counsel would further contended that enquiry that was initiated vide order 24th October, 2002, was concluded and an enquiry report was submitted on 22nd March, 2003, and the same was communicated to the petitioner vide communication dated 5th October, 2006. Further, a resolution, which is placed on record as Annexure APR/1, with the reply to the misc. application, has been passed by the Board of Management on 23rd December, 2014. The resolution has also been communicated to the petitioner. Hence, the action of the respondent-University calls for no interference by this Court.
Heard the learned counsel for the parties and with their assistance, perused the relevant materials available on record as well as gave my thoughtful consideration to the rival submissions at Bar.
For the main thurst of the counsel for the petitioner is for inflicting a penalty not contemplated under Rule 11 of the Rules of 1998 as well as for there is no provision to continue such an enquiry after the petitioner's retirement on attaining the age of superannuation on 25th October, 2002; it will be appropriate to take note of text of Rule 11, which contemplates penalties, that may be imposed on a University employee for good and sufficient reasons, which reads thus:
"III Penalties
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(a) Minor penalties :
(i) Censure
(ii) Withholding of increments without cumulative effect, not exceeding three or promotion for a period to be specified in the order.
(iii) Recovery from pay of the whole or part of any pecuniary loss caused by him to the University by his negiligence, breach of any law, rule or order.
(b) Major penalties :
(i) Withholding of more than three increments without cumulative effect or an increment or increments with cumulative effect.
(ii) Reduction to a lower service, grade or post or to a lower time scale or to a lower stage in the time scale.
(iii) Compulsory retirement on proportionate pension or other retirement benefits.
(iv) Removal from service.
A glance of the Rule 11 reveals that penalties that may be imposed on a University employee, admittedly do not contemplate any provision for withholding the due amount of pay and allowances, gratuity, CPF/pension and leave encasement benefit.
Learned counsel for the respondent-University was also not able to point out any specific Rule under the Rules of 1998, by virtue of which, the respondent-University could continue the enquiry proceedings intitated on the day of retirement of the petitioner i.e. 25th October, 2002. The fact that the petitioner was served with the memorandum/charge-sheet on 25th October, 2002, is also not in dispute.
In case of Bhagirathi Jena (supra), in some of the similar factual matrix wherein Bhagirathi Jena was proceeded with disciplinary proceedings under the Orrisa State Financial Corporation Staff Regulations, 1975 (for short, Regulations of
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1975), placing him under suspension and there was no contemplation under the Regulations of 1975, for continuation of disciplinary enquiry for the purpose of reduction of retiral benefits, the Supreme Court observed thus:
"6. In view of the absence of such 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 30.6.95, there was no authority vested in the Corporation or 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 authority, it must be held that the enquiry had lapsed and the appellant was entitled to full retiral benefits on retirement.
In the case of Dev Prakash Tewari (surpa), in the backdrop
of Uttar Pradesh Co-operative Employees Service Regulations, 1975, wherein the enquiry was continued even after retirement of the employee; the Supreme Court in no uncertain terms held that after retirement of employee, disciplinary proceedings could not have been continued for there were no provisions in this regard in the service regulations nor any provision for recovery after retirement on establising the misconduct. It will be relevant to take note of contents of para 6 to 9 of the opinion of the Supreme Court in the case of Dev Prakash Tewari (supra), which read thus:
"6. We have carefully considered the rival submissions. The facts are not in dispute. The High Court while quashing the earlier disciplinary proceedings on the ground of violation of principles of natural justice in its order dated 10.1.2006 granted liberty to initiate the fresh inquiry in accordance with the Regulations. The Appellant who was reinstated in
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service on 26.4.2006 and fresh disciplinary proceeding was initiated on 7.7.2006 and while that was pending, the Appellant attained the age of superannuation and retired on 31.3.2009. There is no provision in the Uttar Pradesh Co-operative Employees Service Regulations, 1975, for initiation or continuation of disciplinary proceeding after retirement of the Appellant nor there is any provision stating that in case misconduct is established a deduction could be made from his retiral benefits. An occasion came before this Court to consider the continuance of disciplinary inquiry in similar circumstance in Bhagirathi Jena's case (supra) and it was laid down as follows:
(i) Regarding the pay and allowances to be paid to the employee for the period of his absence from duty, and
(ii) Whether or not the said period shall be treated as a period on duty.
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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.
Relying upon the opinion of the Supreme Court in the case of Bhagirathi Jena, a Division Bench of Allahabad High Court in the case of Dr. R. B. Agnihotri (supra), held that in absence of any express provision, departmental enquiry could not have continued after superannuation of petitioner - Dr. R. B. Agnihotri.
In the case of UCO Bank & Anr. (supra), the Supreme Court again reiterated the position that ordinarily no disciplinary
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proceedings can be continued in absence of any rule after employee reaches his age of superannuation. Paragraph 22 is relevant for this purpose, which reads thus:
"22. Drawing up of a charge sheet, therefore, is the condition precedent for initiation of a disciplinary proceedings. We have noticed in paragraph 15 of our judgment that ordinarily no disciplinary proceedings can be continued in absence of any rule after an employee reaches his age of superannuation. A rule which would enable the disciplinary authority to continue a disciplinary proceedings despite the officers reaching the age of superannuation must be a statutory rule. A' fortiori it must be a rule applicable to a disciplinary proceedings."
Applying the principles propounded by the Supreme Court, as have been extracted hereinabove, in the cases, which have been referred to and relied upon by the counsel for the petitioner; a Coordinate Bench of this Court in the case of Ram Bux (supra), observed thus:
"It would be evident from the above that the respondents have enumerated various penalties in the aforesaid clause, but there is no provision whereby either the respondents can decide to withhold or reduce the pension of a retired employee, nor otherwise indicated any penalty, which can be awarded to a retired employee. Once it is found that there is no provision of continuing or conducting a disciplinary enquiry against an employee after his retirement or a disciplinary proceedings to be continued after his retirement, the respondents do not have any authority to withhold the retiral benefits of the petitioner on the basis of enquiry that was initiated long before his retirement. In fact, the petitioner retired on 31.5.2008 and the alleged disciplinary proceeding that was started against him, was of the year 1973, 1974 and 1976. If those enquiries do not come to their logical conclusion at such length of time, they should be treated as lapse for such an enormous delay. The Supreme Court in UCO Bank, supra dealing with this subject in para 22 of the judgement as held as under:
“22. Drawing up of a charge sheet, therefore, is
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the condition precedent for initiation of a disciplinary proceeding. We have noticed in paragraph 15 of our judgement that ordinarily no disciplinary proceedings CW 12921/08 5 can be continued in absence of any rule after an employee reaches his age of superannuation. A rule which would enable the disciplinary authority to continue a disciplinary proceedings despite the officers reaching the age of superannuation must be a statutory rule. A 'fortiori' it must be a rule applicable to a disciplinary proceedings.”
In Bhagirathi Jena, supra, the Supreme Court in para 6 of the report has held as under:
“6. In view of the absence of such 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 appellate 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 authority, it must be held that the enquiry had lapsed and the appellant was entitled to full retiral benefits on retirement.”
The Allahabad High Court in Dr. R.B. Agnihotri, supra also dealing with the same subject has held that in absence of expressed provision, departmental proceedings could not have been concluded after superannuation of the petitioner in that CW 12921/08 6 case."
In the case of M. Bhaskaran (supra), which has been
referred to and relied upon by counsel for the respondentUniversity, in support of the impugned action referring to para 6, suffice it is to observe that the observations made by the Supreme Court were in the factual matrix wherein the respondent-workmen obtained employment in railway service run
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by Union of India, on the basis of bogus and forged casual labourers service cards and could not be continued in railway service. Once the fraud was detected by the railways and for the claim of the workmen was granted by the Central Administrative Tribunal, Ernakulam Bench, referring to the text of Rule 3(1)(i) and (iii) of Railway Services (Conduct) Rules, 1966, referring to the defination of misconduct; the Supreme Court made those observations. Thus, the factual matrix of the case referred to and relied upon is entirly different and distinguishable from the case at hand.
For the reasons and discussions aforesaid, the writ application succeeds and is hereby allowed.
The respondent-University is directed to release due amount of pay and allowances, gratuity, CPF/pension and leave encasement benefits, as admissible to the petitioner along with interest @ 9% per annum from the date the amount became due till the date of payment.
Compliance of this order be ensured by the respondentUniversity within a period of two months from the date a certified copy of this order is presented.
No costs.
(VEERENDR SINGH SIRADHANA)J.
Pooja/157
2 issues framed by the court
Whether departmental enquiry proceedings initiated on the day of an employee's retirement can be continued after superannuation.
Whether withholding terminal benefits (pension, gratuity) constitutes a penalty under Conduct and Disciplinary Rules, 1998.
Colour shows how this judgement treated each authority
Bhagirathi Jena Vs. Board of Directors, O. S. F. C. and Ors.Relied on¶50
AIR 1999 SC 1841 · Who else cites this
Dev Prakash Tewari Vs. U. P. Cooperative Institutional Service Board, Lucknow & Ors.Relied on¶56
2014 (7) SCC 260 · Who else cites this
Dr. R. B. Agnihotri Vs. State of U. P.Relied on¶73
2000 All. LJ 1719
UCO Bank & Anr. Vs. Rajinder Lal CapooRelied on¶74
2008 5 SCC 257 · Who else cites this
Ram Bux Singh Vs. RSRTC & Anr.Relied on¶79
SBCWP No. 12921/2008
Union of India & Ors. Vs. M. BhaskaranDistinguished¶89
1995 Supp. (4) SCC 100 · Who else cites this
1 provisions across 1 enactments
Dr. N.M. Khandelwal
Maharishi Dayanand Saraswati University
Veerendr Singh Siradhana
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
