Holding

The President may withhold pension only upon a departmental finding of grave misconduct, and the Rules do not empower withholding of gratuity; therefore, the order to withhold both pension and gratuity was illegal.

Summary

The appellant, a civil servant, was transferred to New Delhi but failed to report for duty, leading to disciplinary proceedings under the Central Civil Services (Conduct) Rules. While the proceedings were pending, he took voluntary retirement, and the government continued the enquiry under Rule 9 of the Central Civil Services (Pension) Rules, ultimately withholding his pension and gratuity as punishment. The Supreme Court held that Rule 9(2) allows continuation of disciplinary proceedings after retirement, but the President may withhold pension only if a finding of grave misconduct under Rule 8(5) Explanation (b) is recorded. The Court found no such finding and noted that the Rules do not authorize withholding of gratuity. Consequently, the order to withhold both pension and gratuity was illegal and was set aside.

Issues considered

Whether disciplinary proceedings initiated while a government servant was in service continue after voluntary retirement under Rule 9(2) of the Central Civil Services (Pension) Rules, 1972.
Whether the President has authority to withhold pension as a punitive measure after retirement without a finding of grave misconduct.
Whether the Rules empower the President to withhold gratuity in addition to pension as punishment.
Whether the appellant's absence from duty amounted to "grave misconduct" as defined in Rule 8(5) Explanation (b).

Legislation cited

Central Civil Services (Conduct) Rules, 1964s. Rule 3(1)(i), s. Rule 3(1)(iii)
Central Civil Services (Pension) Rules, 1972s. Rule 8(5) Explanation (b), s. Rule 9(1), s. Rule 9(2)
Official Secrets Act, 1923s. Section 5

Subjects

pensiongratuitygrave misconductdisciplinary proceedingsvoluntary retirementCentral Civil Services (Pension) Rulespublic service lawArticle 41 Constitution of India

Judgment

D.V. KAPOOR
A
v.
UNION OF INDIA AND ORS.

AUGUST 7, 1990

[L.M. SHARMA. AND K. RAMASWAMY, JJ.) B

Central Civil Services (Pension) Rules, 1972: Rules 8(5)-
Explanation (b) and 9-Pension and gratuity-Withholding of-For
absence from duty-Whether valid and legal-'Grave misconduct'-
Interpretation of-Disciplinary proceedings initiated while in service-
Continued and concluded on voluntary retirement-Whether valid and
legal. c
Central Civil Services (Conduct) Rules 1964: Rules 3( 1)(1) and
-· 3(1)(iii)-Absence from duty-Whether 'grave misconduct'-With-
holding of pension-Whether permissible.
D
Words & Phrases: 'Grave misconduct'-Meaning of-Rule 8(5),
Explanation (b) Central Civil Services (Pension) Rules, 1972.

Disciplinary proceedings were initiated against the appellant for
wilful contravention of Rules 3(l)(i) and 3(l)(iii) of the Central Civil
Services (Conduct) Rules. 1964 bv absenting himself from duty without E
authorisation and in not rep<lrting to duty at New Delhi office on trans-
fer from London office. Pending proceedings, he was allowed to retire
voluntarily but was put on notice that the disciplinary proceedings
would be continued under rule 9 of the Civil Services Pension Rules,
1972. Thereafter, on completion of the enquiry, the President of India
in consultation with the Union Public Service Commission, decided to F
withhold the entire gratuity and pension otherwise admissible to the
appellant, on permanent basis, as a measure of punishment. The appel-
lant's writ petition challenging the legality Of the order was dismissed
hy the High Court, in limine.

In the appeal by special leave, before this Court, on behalf of the G
appellant it was contended that since the appellant had been allowed to
retire voluntarily, the proceedings stood abated, and the authorities
were devoid of jurisdiction to impose the penalty of withholding
gratuity and pension as a measure of punishment, and that for award-
ing the said punishment the appellant must be found to have committed
grave misconduct or negligence within the meaning of Rule 8(5), Exp- H
lanatioin (b)·
697
698 SUPREME COURT REPORTS [1990] 3 S.C.R.

Allowing the appeal, this Court,
A ~

HELD: 1. Rule 9(2) of the Central Civil Services (Pension) Rules,
1972 provided that the departmental proceedings if instituted while the
Government servant was in service, whether before his retirement or
during his re-employment, should, after the rmal retirement of the
B Government servant, be deemed to be proceedings under the rule and
should be continued and concluded by the authority by which they were
commenced in the same manner as if the Government servant had .-.....-
continued in service. [701A-B]

In the instant case, merely becanse the appellant was allowed to
retire, the Government is not lacking jurisdiction or power to continue
c the proceedings already initiated to the logical conclusion thereto. The
only inhibition is that where the departmental proceedings are lnsti-
toted by an authority subordinate to the President, that authority
should submit a report recording its fmdings to the President. That has
been done, and the President passed the order under challenge. There-
D fore, the proceedings are valid in law and are not abated consequent to
voluntary retirement of the appellant and the order was passed by the
competent authority, i.e. the President of India. [70 IB-D]

2.1 Public employee holding a civil post or office under the State
has a legitimate right to earn his pension at the evening of his life after ~

E retirement be it on superannuation or voluntary retirement. It is not a
bounty of the State. Equally too of gratuity, a statutory right, earned by
him. Article 41 of the Constitution accords right to assistance at the old
age of sickness or disablement. Therefore, when a Government
employee is sought to be deprived of his pensionary right which he had
~
earned while rendering services under the State, such a deprivation
F must be in accordance with law. [701F-G; 7020] ......
D.S. Nakara & Ors. v. Union of India, [1983] 2 SCR 165, relied
on.

2.2 Under Rule 9(1) of the Central Civil Services (Pension) Rules,
G 1972, the President has reserved to himself the right to withhold
pension in whole or in part, whether permanently or for a specified
period, or he can recover from pension of the whole or part of any .,...i..~
pecuniary loss caused by the Government employee to the Government
subject to the minimum. However, the exercise of the power is hedged
with a condition precedent that a fmding should he recorded either in
H departmental enquiry or judicial proceedings that the pensioner. com-
D.V. KAPOOR v. U.0.1. 699

mitted grave misconduct or negligence in the discharge of his duty while
in office, as defined in Rule 8(5), Explanation (b), which is an inclusive A
definition, i.e. the scope is wide of mark, dependent on the facts or
circumstances in a given case. In the absence of such a finding, the
President is without authority of law to impose penalty or withholding
pension as a measure of punishment either in whole or in part, per-
manently or for a specified period. [702G-H;'704B; 703E-F] B

In the instant case, the Inquiry Officer found that though the
appellant derelicted his duty to report to duty, at New Delhi on transfer
from London, it was not wilful for the reason that he could not move due
to his wife's illness and he recommended to sympathetically consider
the case of the appellant and the President accepted this fmding, but
decided to withhold gratuity and payment of pension permanently, in c
consultation with the Union Public Service Commission. [703G-H; 704A]
•
The employee's right to pension is a statutory right. The measure
of deprivation therefore, must be correlative to or commensurate with
the gravity of the grave misconduct or irregularity as it offends the right D
to assistance at the evening of his life as assured under Article 41 of the
Constitution. The right to gratuity is also a statutory right. The appel-
lant was not charged with nor was given an opportunity that his
gratuity would be withheld as a measure of punishment. There is no
provision of law under which the President is empowered to withhold
gratuity as well, after his retirement as a measure of punishment. E
Therefore, the order to withhold the gratuity as a measure of penalty is
illegal and devoid of jurisdiction. Since there is no finding that appel-
lant 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. [704D-G]
f
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5025.
of 1985.

From the Judgment and Order dated 25 .3 .1985 of the Delhi High
Court in C.W.P. No. 686of 1985.
G
Arun K. Sinha for the Appellant.

--. i. N.S Hegde, Additional Solicitor General, T.C. Sharma and Mrs.
Sushma Suri for the Respondents.

The Judgment of the Court was delivered by H
700 SUPREME COURT REPORTS [1990] 3 S.C.R.

K. RAMASWAMY, J. l. This appeal by special leave under
A
Art. 136 of the Constitution arises against the decision of the Delhi
High Court in C.W.P. No. 686 of 1985 dated March 25, 1985. The
appellant was working as an Assistant Grade IV of the Indian Foreign
Service, Branch 'B' in Indian High Commission at London. On
November 8, 1978 he was transferred to the Ministry of External
B Affairs, New Delhi, but he did not join duty as commanded, resulting
in initiation of disciplinary proceedings against him on August
23, 1979. Pending the proceedings, on February 26, 1980 the appellant
sought voluntary retirement from service and by proceedihgs dated
October 24, 1980 he was allowed to retire but was put on notice that
the disciplinary proceedings initiated against him would be continued
under rule 9 of Civil Services Pension Rules, 1972 for short 'Rules'.
c His main defence in the explanation was that his wife was ailing at
London and, therefore, he sought for leave for six days in the first
instance and 30 days later, which was granted, but as she did not
recover from the ailment, he could not undertake travel. So he sought
for more leave, but when it was rejected, he was constrained to opt for
o voluntary retirement. After conducting the enquiry the Inquiry Officer
submitted his report dated May 19, 1981. The gravemen of charges as
stated earlier are that the appellant absented himself from duty from
December 15, 1978 without any authorisation and despite his being
asked to join duty he remained absent from duty which is wilful contra-
vention of Rule 3(i)(ii) and 3(i)(iii) of the Civil Services Conduct Rule
E 1964. The Inquiry Officer found that "it is however d.ifficult to say
whether bis absenting himself from duty was entirely wilful". In the
concluding portion he says that both the articles of charges have been
established, the circumstances in which the appellant violated the rules
require a sympathetic consideration while deciding the case under
Rule 9 of the Rules. The President, on consideration of the report, ~.
F agreed with the findings of the Inquiry Officer and in consultation with
the Union Public Service Commission decided that the 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. When the appellant challenged the legality
tqereof, the High Court dismissed the writ petition in limine on the
G ground that it would not interfere in its discretionary jurisdiction
under Art. 226 of the Constitution.

2. The contention of Mr. Kapoor, learned counsel for the appel-
lant is that the appellant having been allowed to retire voluntarily the
authorities are devoid of jurisdiction to impose the penalty of with-
H holding gratuity and pension as a measure of punishment and the
D.V. KAPOOR v. U.0.1. [RAMASWAMY, J.] 701

proceedings stand abated. We fnd no substance in the contention.
A
Rule 9(2) of the Rules provided that the departmental proceedngs if
instituted while the Government servant was in service whether before
his retirement or during his re-employment, shall, after the final retire-
ment of the Government servant, be deemed to be proceedings under
this rule and shall be continued and concluded by the authority by
which they were commenced in the same manner as if the Government B
servant had continued in service. Therefore, merely because the
appellant was allowed to retire, the Government is not lacking juris-
--y-- diction or power to continue the proceedings already initiated to the
logical conclusion thereto. The disciplinary proceedings initiated
under the Conduct Rules must be deemed to be proceedings under the
rules and shall be continued and concluded by the authorities by which
the proceedings have been commenced in the same manner as if the c
Government servant had continued in service. The only inhibition
thereafter is as provided in the proviso namely "provided that where
the departmental proceedings are instituted by an authority sub-
ordinate to the President, that authority shall submit a report record-
ing its findings to the President". That has been done in this case and D
the President passed the impugned order. Accordingly we hold that
the proceedings are valid in law and they are not abated consequent to
voluntary retirement of the appellant and the order was passed by the
competent authority, i.e:'tfie President of India.

. 3. His further contention that the. appellant must be found to E
have committed "grave misconduct" or "negligence" within the mean-
ing of Rule 8(5)(2) of the Rules which alone gives power and jurisdic-
-. tion to the authority to withhold by way of disciplinary measure the
gratuity and payment of pension: Public employee holding a civil post
or office under the State has a legitimate right to earn his pension at
the evening of his life after retirement, be it on superannuation or F
voluntary retirement. It is not a bounty of the State. Equally too of
gratuity, a statutory right, earned by him. Article 141 of the Constitu-
tion accords right to assistance at the old aged or sickness or disable-
ment. In D.S. Nakara & Ors. v. Union of India, [1983] 2 SCR 165 the
Constitution Bench of this Court held that pension is not only compen-
sation for loyal service rendered in the past, but also by the broader G
significance in that it is a social welfare measure rendering socio-
economic justice by providing economic security in the fall of life when
physical and mental prowess is ebbing corresponding to ageing process
and, therefore, one is required to fall back on savings. One such saving
in kind is when one had given his best in the hey-day of life to his
employer, in days of invalidity, economic security by way of periodical H
702 SUPREME COURT REPORTS I1990] 3 S.C.R.

A payment is assured. Therefore, it is a sort of stipend made in consi-
deration of past service or a surrender of rights or emoluments to one -\_
retired from service. Thus pension is earned by rendering long and
efficient service and therefore can be said to be a deferred portion of
the compensation for service rendered. In one sentence one can say
that the most practical raison d'etre for pension is the inability to
B provide for one self due to old age. One may live and avoid unemploy-
ment but not senility and penury if there is nothing to fall back upon.

4. At page 190-D it is stated that pension as a retirement benefit ~-~
is in consonance with and furtherance of the goals of the Constitution.
The goals for which pension is paid themselves give a fillip and push
to the policy of setting up a welfare State because by pension the
C socialist goal of security from gradle to grave is assured at least when it
is mostly needed and least available, namely in the fall of life. There-
fore, when a Government employee is sought to be deprived of his
pensionary right when the had earned while rendering services under
the State, such a deprivation must be in accordance with law. Rule 9( 1)
D of the rules provides thus:

"The President reserves to himself the right of withholding
or withdrawing a pension or part thereof, whether perma-
nently or for a specified period, and of ordering recovery
from a pension of thP- whole or part of any pecuniary loss
E caused to the Government, if, in any departmental c>f judi-
cial proceedings, the pensioner is found guilty or grave
misconduct or negligence during the period of his service
including service rendered upon re-employment after
retirement.

F Provided that the Union Public Service Commission shall
be consulted before any final orders are passed.

Provided further that where a part of pension is withheld or
withdrawn, the amount of such pension shall not be
reduced below the amount of rupees sixty per mensum."
G
Therefore, it is clear that the President reserves to himself the
right to withhold or withdraw the whole pension or a part thereof
whether permanently or for specified period. The President also is -l ~
empowered to order recovery from a pensioner of the whole or part of
any pecuniary loss caused to the Government, if in any, proceeding in
H the departmental enquiry or judicial proceedigs, the pensioner is
D.V. KAPOOR v. U.0.1. [RAMASWAMY, J.] 703

found guilty of gra;e misconduct or negligence during the period of his
A
_;>-. service Including service rendered upon re-employment after retirement.

Rule 8(5), explanation (b) defines 'grave misconduct' thus·
"The expression 'grave misconduct' includes the communi-
cation or disclosure of any secret official code or password
or any sketch, plan, model, article, note, document or B
information, such as is mentioned in Section 5 of the Offi-
cial Secrets, Act, 1923 (19 of 1923) (which was obtained
while holding office under the Government) so as to pre-
judicially affect the interest of the general public of the
security of the State."
In one of the decisions of the Government as compiled by C
Swamy's Pension Compilation, 1987 Edition, it is stated that:
"Pensions are not in the nature of reward but there is a
binding obligation on Government which can be claimed as
a right. Their forfeiture is only on resignation, removal or
dismissal from service. After a pension is sanctioned its D
continuance depends on future good conduct, but it can-
not be stopped or reduced for other reasons."
5. It is seen that the President has reserved to himself the right
'r to withhold pension in whole or in part therefore whether permanently
or for a specified period or he can recover from pension of the whole
or part of any pecuniary loss caused by the Government employee to E
the Government subject to the minimum. The condition precedent is
•. that in any departmental enquiry or the judicial proceedings, the
pensioner is found guilty of grave misconduct or negligence during the
~·· period of his service of the original or on re-employment. The condi-
. tion precedent thereto is that there should be a finding that the deli-
~~ quent is guilty of grave misconduct or negligence in the discharge of F
public duty in office, as defined in Rule 8(5), explanation (b) which is
an inclusive definition, i.e. the scope is wide of mark dependent on the
facts or circumstances in a given case. Myriad situation may arise
depenging on the ingenuinity with which misconduct or irregularity
was committed. It is not necessary to further probe into the scope and
meaning of the words 'grave misconduct or negligence' and under what G
circumstances the findings in this regard are held proved. It is suffice
---.. )._ that charges. in this case are that the appellant was guilty of wilful
misconduct in not reporting to duty after his transfer from Indian High
Commission at London to the Office of External Affairs Ministry,
' Government of India, New Delhi. The Inquiry Officer found that
H
though the appellants derelicted his duty to report to duty, it is not
704 SUPREME COURT REPORTS [1990] 3 S.C.R.

wilful for the reason that he could not move due to his wife's illness
A
and he recommended to sympathetically consider the case of the
appellant and the President accepted this finding, but decided to with-
hold gratuity and payment of pension in consultation with the Union
Public Service Commission.
6. As seen the exercise of the power by the President is hedged
B with a condition precedent that a finding should be recorded either in
departmental enquiry or judicial proceedings that the pensioner com-
mitted grave misconduct or negligence in the disclrarge of his duty
while in office, subject of the charge. In the absence of such a finding
the President is without authority of law to impose penalty of with-
holding pension as a measure of punishment either in whole or in part
c permanently or for a specified period, or to order recovery of the
pecuniary loss in whole or in part from the pension of the employee,
subject to minimum ofRs.60.
7. Rule 9 of the rules empowers the President only to withhold
or withdraw pension permanently or for a specified period in whole or
D 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 right. The measure of deprivation therefore, must be
correlative to or commensurate with the gravity of the grave miscon-
duct or irregularity as it offends the right to assistance at the evening of y
his life as assured under Art. 41 of the Constitution. The impugned
E order discloses that the President withheld on permanent basis the
payment of gratuity in addition to pension. The right 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
F 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.

8. In view of the above facts and law that there is no finding that
appellant did commit grave misconduct as charged for, the exercise of
G 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 ..,l _,-
quashed but in the circumstances parties are directed to bear their own
costs.

N.P.V. Appeal allowed.