GOVERNMENT OF NCT (DELHI) AND ANOTHERversusK. SRIVATSAN

                           [2014] 7 S.C.R. 834

A        GOVERNMENT OF NCT (DELHI) AND ANOTHER
                               v.
                         K. SRIVATSAN
               (Civil Appeal No. 8854 OF 2014)

                         SEPTEMBER 16, 2014
B
     [JAGDISH SINGH KHEHAR AND ARUN MISHRA, JJ.]

          Central Civil Services (Pension) Rules, 1972:
    rr. 9(2)(b)(ii), 9(6)(a) - Withholding of gratuity pending
C   departmental proceedings - Held: r.9(2)(b)(ii) mandates that
    no departmental proceedings can be initiated after the
    retirement of an employee, unless a charge sheet has been
    issued within four years of the event of delinquency - r. 9(6)(a),
    by a deeming fiction of law mandates that departmental
D   proceedings will be deemed to have been initiated against an
    employee who has been placed under suspension - In the
    instant case, respondent was placed under suspension, for the
    first time, on 3. 12. 2007 - Although suspension order was
    revoked on 5. 5. 2008, he was again placed under suspension
E   on 29.2.2008 - The said suspension order subsisted till the
    date of the respondent's superannuation, i.e., till 30.06.2008
    - In view of that, the date of initiation of the departmental
    proceedings against the respondent, by a deeming fiction of
    law, would be the date when he was placed under suspension
F   - Since the respondent was placed under suspension whilst
    he was still in service, r. 9(2)(b)(ii) will have no applicability ·to
    the facts and circumstances of the case - The orders passed
    by the Tribunal and the High Court granting gratuity are set
    aside - Since the respondent had already been released his
G   gratuity, rather than requiring him to refund the entire amount
    of gratuity, it is just and appropriate to require him to furnish
    a bank guarantee to the appellants which would be
    encashable, if he is found guilty of the charges levelled
    against him, on the culmination of the departmental
H   proceedings.
                                    834
  GOVERNMENT OF NCT (DELHI) v. K. SRIVATSAN              835

      The respondent-employee was charged of financial A
 dereliction and favoritism and suspended by the
 appellant on 03.12.2007. However, the suspension order
 was revoked on 05.02.2008. He was again placed under
;suspension by order dated 29.02.2008 ..On 30~09.2008, the
 respondent attained the age of superannuation. On B
 27.06.2008, the appellant lodged a complaint to the CBI
 for initiating action against the respondent. After
 investigation, the CBI gave closure report oil 28.1.201 O
 which was accepted on 15.10.2012. On 19.04.2012, the
 CBI recommended departmental action against the C
 respondent and charge sh~et was served on him ·on
 07 .05.2012.

    The grievance of the respondent was that he was not
paid gratuity after his superannuation. Aggrieved he
succe~sfully filed OA before th~ CAT. The appellant filed D
writ petition which was dismissed. Hence the appeal.
     Allowing the appeal, the Court

   .   HE~D: 1. The issue of release of gratuity i~ regulated
                                                                E
  by Rule 9 of the Central Civil Services (Pension) Rules,
· 1972. A perusal of Rule 9(1) of the Pension Rules reveals,
·that gratuity can be withheld if "departmental or judiCial
  proceedings" are pending against the concerned
  employee. Rule 9(2)(b)(ii) mandates, that no departmental
  proceedings can be initiated after the retir.ement of an      F
  employee, unless a charge sheet has been issued within
  four years of the event of delinquency. The determination
, rendered by the. High Court led to the conclusion, that
  since no charge sh~et was issued to the respondent,
. after his su.perannuation within the period contemplated      G
  by Rule 9(2)(b)(ii), it was no· longer competent for the
  authorities to take departmental action against him, since
  more than f6ur ye~us had lapsed. [Paras 8 & 9] [839-D;
· 841-F-H; 842-A]
                                                                H
    836     SUPREME COURT REPORTS                  [2014] 7 S.C.R.

A         2. Rule 9(6)(a) states that initiation of departmental
    proceedings will be assumed when the statement of
    charges is issued to an employee. In the instant case, it
    is not a matter of dispute that the charge sheet was
    issued on 19.04.2012. That being the position, it was
B   asserted on behalf of the Tespondent, that the allegation
    of delinquency having occurred much before the period
    of four years from the date of issuance of the charge
    sheet, no departmental proceedings could have been
    initiated against the respondent within the meaning of
C   Rule 9(2)(b)(ii) of the Pension Rules. Rule 9(6)(a), by a
    deeming fiction of law also mandates, that departmental
    proceedings will be deemed to have been initiated
    against an employee who has been placed under
    suspension. The respondent was placed under
o   suspension, for the first time, on 3.12.2007. Event though
    the suspension order was revoked on 5.5.2008, the
    respondent was again placed under suspension, by a
    subsequent order dated 29.2.2008. The said suspension
    order subsisted till the date of the respondent's       '
E   superannuation, i.e., till 30.06.2008. In view of that, the
    date of initiation of the departmental proceedings against
    the respondent, by a deeming fiction of law, would be the
    date when he was placed under suspension. Since the
    respondent was placed under suspension whilst he was
F   still in service, it is apparent that Rule 9(2)(b)(ii) will have
    no applicability to the facts and circumstances of the
    present case. The orders passed by the Tribunal and the
    order passed by the High Court are set aside. [Paras 10,
    11 & 13] [842-8-H; 843-A]

G      3. Since the respondent had admittedly retired on
  attaining the age of superannuation on 30.06.2008, and
  has already been released his gratuity, rather than
  requiring the respondent to refund the entire amount of
  gratuity, it is just and appropriate to require him to furnish
H a bank guarantee to the appellants. If in additior:i to the
. GOVERNMENT OF NCT (DELHI} v. K. SRIVATSAN                  837


gratuity, the respondent was paid any interest thereon,              A
the same shall be refunded forthwith. The bank guarantee
will be encashabJe, if the respondent is found guilty of the
chai:ges levelled against him, on the culmination of the
departmental proceedings. If the respondent is found
innocent, the bank guarantee shall be cancelled. [Para 14)           B
[843-B-D]

    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
8854 of 2014 ·   /

    From the Judgment and Order dated 30.04.2012 of the              C
High Court of Delhi at New Delhi in W.P.(C} No.2495/2012.

    S.P. Singh, Kiran Bhardwaj, P.K. Dey (for B.V.Balaram
Das} for the Appellants.

      Mohan Parasaran, D.L. Chidananda (For Gaurav Dhingra)          D
for the Respondent.

    The Judgement of the Court was delivered by

    J.S.KHEHAR, J. 1. Leave granted.                                 E
     2. K.Srivatsan, the responde,nt in this instant appeal came
to be inducted into the Delhi Administration Subordinate
Service. The instant employment, for all intends and purposes,
may be considered as his parent cadre. On 23.9.2003, he was·
transferr~d by way of deput~tion, to the Municipal Corporation F
of Delhi. lri the Municipal Corporation of Delhi, he was
appointed as an Administrative Officer, Land and Estate
Department. In addition to the aforesaid responsibilities, the
respondent was vested with the charge of Dealing Assistant
in the Land and Estate Department.                               G

     3. Whilst the respondent was on deputation, charges of
financial derelic;:tion and favoritism came to be levelled against
him. The Municipal .Corporation of Delhi was of the view, that
as a consequence of unauthorised decisions of the                    H
    838     SUPREME COURT REPORTS                  [2014] 7 S.C.R.


A respondent, it had to suffer extensive financial loss running into
   crores of rupees. It is for the aforesaid reason, that the
   respondent came to be suspended by the Municipal'!
   Corporation of Delhi on 3.12.2007. The above order of
  ·suspension was, however, revoked on 5.2.2008.
a      4. The Municipal Corporation of Delhi, again placed the
  respondent under suspension by an order dated 29.2.2008. It
  thereupon passed an or~er dated 26.3.2008, ordering
  repatriation of the respondent to his parent cadre. On
  19.5.2008, the respondent's parent department, i.e., the Delhi
C Administration, informed the Municipal Corporation of Delhi, that
  the respondent could not be repatriated, as he had been placed
  under suspension. It is in the aforesaid circumstances, that the
  respondent remained with the Municipal Corporation of Delhi.
  He also remained under suspension. On 30.06.2008, the
D respondent attained the age of superannuation. On that very
  day, his repatriation to the parent department was accepted.
           5. On 27.06.2008, the Municipal Corporation of Delhi
    lodged a complaint to the Central Bureau of Investigation
E making allegations, inter alia, against the respondent, and
  . recommended the initiation of action under the provisions of
    the Prevention of Corruption Act. 1988. The CBI registered the
    first information report, on the basis of the above complaint on
    30.06.2008. Having investigated into the matter, the CBI
F submitted its closure report on 28.1.2010. The aforesaid
    closure report was accepted on 15.10.2012. On 19.04.2012,
    the CBI recommended departmental action against the.
    respondent. After the recommendations of departmental action ,
    by the CBI, a charge sheet was issued to the respondent on
G 19.4.2012. The respondent received the aforesaid charge sheet,
    on 7.5.2012.
        6. The controversy in the present case hinges on the
  entitlement of the respondent to gratuity)nlmediately after his
  superannuation on 30.06.2008. Since gratuity was not paid to
H him, he approached the Central Administrative Tribunal, New
  GOVERNMENT. Of NCT (DELHI) v~ K. SRIVATSAN                   839
         [JAGDISH SINGH KHEHAR, J.]
Delhi (hereinafter referred to as the 'Tribunal') by filing Original   A
Application No.1188 of 2011. The above original application
came to be allowed by the Tribunal on 15.11.2011.

        7. Dissatisfied with the order passed by the Tribunal, the
 appellants before this Court preferreq Writ Petition No.2495 of
                                                                       8
 20l2 before the:High Court of Delhi ~hereinafter referred to as
 the 'High Court'). During the pendency of the aforesaid writ
 petition, the respondent filed Contempt Petition No.138 of 2012.
  It is not a matter of dispute, that consequent upon initiation of
  the above contempt petition, the respondent was released his
  gratuity. Writ Petition No. 2495 of 2012 was dismissed by a          C
  Division Bench of the High Court on 30.04.2012. The order
, dated 30.04.,?012 has been impugned by the appellants before
  this Court.

      8. Insofar as the issue of release of gratuity is concerned,     D
it is not a matter of dispute that the same is regulated by Rule
9 of the Central Civil Services (Pension) Rules, 1972
(hereinafter referred to as the 'Pension Rules'). Rule 9 is being
extracted hersunder:
                                                                       E
      9. Right of President to withhold or withdraw pension

     (1) The President reserves to himself the right of
     withholding a pension or gratuity, or both, either in full or
     in part, or withdrawing a pension in full or in part, whether
     permanently or for a specified period, and of ordering            F
     recovery from a pension or gratuity of the whole or part of
     any pecuniary loss caused to' the Government, if, in any
     departmental or judicial proceedings, the pensioner is
     found guilty of grave misconduct or negligence during the
     period of service, including service rendered upon re-            G
     employment after retirement:

      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        H
    840       SUPREME COURT REPORTS                  [2014] 7 S.C.R.

A         or withdrawn, the amount of such pensions shall not be
          reduced below the amount of rupees three hundred and
          seventy-five per mensem.]

          (2)(a)
B         The departmental proceedings referred to in sub-rule (1 ),
          if instituted while the Government servant was in service
          whether before his retirement or during his re-employment,
          shall, after the final retirement of the Government servant,
          be deemed to be proceedings under this rule and shall be
c         continued and concluded by the authority by which they
          were commenced in the same manner as if the
          Government servant had continued in service :

          Provided that where the departmental proceedings are
D         instituted by an authority subordinate to the President, that
          authority shall submit a report recording its findings to the
          President.

          (b) The departmental proceedings, if not instituted while
          the Government servant was in service, whether before his
E         retirement, or during his re-employment, -

          (i) shall not be instituted save with the sanction of the
          President,

          (ii) shall not be in respect of any event which took place·
F
          more than four years before such institution, and

          (iii) shall be conducted by such authority and in such place
          as the President may direct and in accordance with the
          procedure applicable to departmental proceedings in
          which an order of dismissal from s~rvice could be made
          in relation to the Government servant during his service.

          (3) Delete,d

          (4) In the case of Government servant who has retired on
H
     GOVERNMENT OF NCT (DELHI) v. K. SRIVATSAN                  841
            [JAGDISH SINGH KHEHAR, J.]
        attaining the age of superannuation or otherwise and            A
        against whom any departmental or judicial proceedings
        are instituted or where departmental proceedings are
        continued under sub-rule (2), a provisional pension as
        provided in Rule 69 shall be sanctioned.
                                                                        B
        (5) Where the President decides not to withhold or
        withdraw pension but orders recovery of pecuniary loss
        from pension, the recovery shall not ordinarily be made at
        a rate exceeding one-third of the pension admissible on
        the date of retirement of a Government servant.
                                                                        c
        (6) For the purpose of this rule, -

        (a) departmental proceedings shall be deemed to be
        instituted on the date on which the statement of charges
        is issued to the Government servant or pensioner, or if the o
        Government servant has been placed under suspension .
        from an earlier date, on such date ; and
        (b) judicial proceedings shall be deemed to be instituted
                                                                        E
        (i) in the case of criminal proceedings, on the date on
        which the complaint or report of a police officer, of which
        the Magistrate takes cognizance, is made, and

        (ii) in the case of civil proceedings, on the date the plaint   F
        is presented in the court."

         9. A perusal of Rule 9(1) of the Pension Rules reveals, that
    gratuity can be withheld if "departmental or judicial
    proceedings" are pending against the concerned employee.
    Rule 9(2)(b)(ii) mandates, that no departmental proceedings         G
    can .be initiated after the retirement of an employee, unless a
    cha·rge sheet has been issued within four years of the event of
    delinquency. The determination rendered by the High Court
1
    leads to the conclusion, that since no charge sheet had been
    issued to the respondent, after his superannuation within the       H
    842      SUPREME COURT REPORTS                  [2014] 7 S.C.R.


A   period contemplated by Rule 9(2)(b)(ii}, it was no longer
    competent for the authorities to take departmental action
    against him, since more than four years had lapsed.

       10. Insofar as the institution,, of the departmental
  proceedings are concerned, which would determine whether or
8
  not the ·concerned employee would be entitled to gratuity,
  reference may be made to Rule 9(6) of the Pension Rules. Rule
  9{6){a} leaves no room for any doubt, that initiation of
  departmental proceedings will be assumed when the statement
C of charges is issued to an employee. In the present case, it is
  not a matter of dispute that the charge sheet was issued on
  19.04.2012. That being the position, it was asserted on behalf
  of the respondent, that the allegation of delinquency having
  occurred much before the period of four years from the date of
  issuance of the charge sheet, no departmental proceedings
D could ha,ve been initiated against the respondent within the
  meaning of Rule 9(2)(b)(ii) of the Pension Rules.

      11. It is pertinent to mention that Rule 9 (6)(a), by a
  deeming fiction of law also mandates, that departmental
E proceedings will be deemed to have been initiated against an
  employee who has been placed under suspension.

        12. Insofar as the present controversy is concerned, it is
  apparent that the respondent was placed under suspension, for
F the first time, on 3.12.2007. Event though the above suspension
  order was revoked on 5.5.2008, the respondent was again
  placed under suspension, by a subsequent order dated
  29.2.2008. The said suspension order subsisted till the date
  of the respondent's superannuation, i.e., till 30.06.2008. In the
  above view of the matter, the date of initiation of the
G departmental proceedings against the respondent, by a
  deeming fiction of law, would be the date when he was placed
  under suspension. Since the respondent was placed under
  suspension whilst he was still in service, it is apparent that Rule
  9(2)(b)(ii) will have no applicability to the facts and
H circumstances of the present case.
 GOVERNMENT OF NCT (DELHI) v. K. SRIVATSAN-                  843
       [JAGDISH SINGH f5HEHAR, J.]
    13. In view of the above, the instant appeal is allowed, the     A
orders dated 15.11.2011 passed by the Tribunal in Original
Application NO. 1188 of 2011 and the order dated 30.04.2012
passed by the High Court in Writ Petition(C) No.2495 of 2012
are set aside.
                                                                     B
     14. Since the respondent had admittedly retired on
attaining the age of superannuation on 30.06.2008, and has
already been released his gratuity, we are of the view that,
rather than requiring the respondent to refund the entire amount
of gratuity, it would be just and appropriate to require him to      C
furnish a bank guarantee to the appellants. If in addition to the
gratuity, the respondent was paid any interest thereon, the same
shall be refunded forthwith. The aforesaid bank guarantee may
be furnished within a period of two months from today. The
bank guarantee will be encashable, if the respondent is found
guilty of the charges levelled against him, on the culmination of    D
the departmental proceedings. If the respondent is found
innocent, the bank guarantee shall be cancelled.

Devika Gujral                                      Appeal allowed.




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