Holding

The State Government is empowered to issue a show‑cause notice under Article 470(b) to reduce a retired servant's pension, provided a hearing is afforded, and the High Court erred in quashing the notice and in entertaining a post‑disposal miscellaneous application.

Summary

Brahma Datt Sharma, an executive engineer of Uttar Pradesh, was dismissed in 1972 after a departmental inquiry and later had the dismissal order quashed by the High Court in 1984 because he was not given a chance to see the recommendation on the quantum of punishment. While he was retired, the State Government issued a show‑cause notice on 29 January 1986 under Article 470(b) of the U.P. Civil Service Regulations seeking forfeiture of his pension and gratuity on the ground of unsatisfactory service. Sharma filed a miscellaneous application in the already‑disposed writ petition challenging the notice, and the High Court quashed the notice, holding that the same charges could not be used after the dismissal order was set aside. The Supreme Court held that the State Government was competent to issue the notice, that the servant must be given a hearing, and that the High Court erred in entertaining a miscellaneous application after final disposal of the writ petition. It further clarified that pension reduction is permissible under the regulations even after retirement if misconduct is established, and that natural‑justice principles require a hearing though Article 311(2) is not attracted. Consequently, the appeal was allowed and the High Court’s order quashing the notice was set aside.

Issues considered

Whether the State Government can issue a show‑cause notice under Article 470(b) of the U.P. Civil Service Regulations to reduce the pension of a retired servant after the dismissal order has been quashed.
Whether the same set of charges that led to the quashed dismissal can be used for pension reduction.
Whether the High Court had jurisdiction to entertain a miscellaneous application in a writ petition that had been finally disposed.
Whether natural‑justice principles, including a right to be heard, apply to pension‑reduction proceedings under the regulations.
Whether Article 311(2) of the Constitution is attracted in pension‑reduction cases.

Legislation cited

Constitution of Indias. 226, s. 311(2)
U.P. Civil Service Regulationss. 470(b)

Subjects

pension reductionshow cause noticecivil service regulationsdisciplinary proceedingsretirementnatural justiceArticle 470Article 311Article 226writ petitionmiscellaneous application

Judgment

STATE OF UTTAR PRADESH
A
v.
BRAHMA DATT SHARMA AND ANR.

FEBRUARY 25,1987

B [A.P. SEN AND K.N. SINGH, JJ.).

U.P. Civil Service Regulations, Article 470(b): Pension-Whether
Government competent to direct reduction-Government Servant-
Whether entitled to be heard.

c Practice and Procedure: _.,...,_
' ----
Government servant-Show cause notice issued under statutory
. provision-Courts to be reluctant to interfere unless issuance palpably
without any authority of law. ~

D Service law.

Disciplinary procee/iings-Whether could be resumed after
superannuation.

Article 470(b) of the U.P. Civil Service Regulations provides for
E reduction in pension amount by the sanctioning authority in cases
where the service of a Government servant bas not been thoroughly
satisfactory.

A number of charges framed against the first respondent were
found proved in a departmental inquiry. He was dismissed from service
F by order dated November IO, I972. The U.P. Pnblic Service Tribunal
upheld the dismissal. In a writ petition filed by him the High Court
quashed the said order on August IO, I984 on the ground that he had
not been afforded reasonable opportunity of defence inasmuch as the
recommendation of the inquiry officer relating to the quantum of
punishment had not been communicated to him. Since the respondent
G had already retired from service during the pendency of the petition
only consequential reliefs were granted.

The State Government issued a notice to him on January 29, I98'
calling upon him to show cause as to why orders for forfeiture of bis
pension and gratuity be not issued in accordance with Article 470(b) of
H the Civil Service Regulations as bis services have not been wholly satis-

444
STATE OF U.P. v. B.D. SHARMA 445

factory. It contained allegations or misconduct. The respondent there- A
-. upon filed on application in the writ petition which bad already been
disposed or on August 10, 1984. The High Court held that since depart-
mental proceedings taken against the respondent bad already been
quashed, it was not open to the State Government to issue show cause
notice for imposing reduction in the respondent's pension on the same B
set of charges.

' Allowing the appeal by special leave, the Court,

.;. ~-- '
HELD:l. When a show cause notice is issued to a Government
servant under a statutory provision be mu.st place bis case before the
authority concerned by showing cause. The courts should be reluctant C
to interfere with the notice at that stage unless it is shown to have been
1 issued palpably without any authority of law. The purpose of issuing
show cause notice is to afford opportunity of bearing to the Government
servant and once cause is shown it is open-to the Government to con-
sider the matter in the light of the facts and submissions placed by the D
Government servant and only thereafter a final decision in the matter
could be taken. Interference by the Court before that stage would be
premature. The High Court, therefore, ought not to have interfered
with the show cause notice in the instant case. [452H; 453A-C]

2.1 When proceedings stand terminated hy final disposal of a
E
writ petition it is not open to the Court to reopen them by means of
miscellaneous application in respect of a matter which provided a fresh
cause of action. [453F]

2.2 In the instant case Respondent's writ petition challenging the
order of dismissal having been finally disposed of on August 10, 1984 no' F
·+-· miscellaneous application could be filed in the writ petition to revive
those proceedings. If the respondent was aggrieved by the notice dated
January 29, 1986 he could have tiled a separate petition under Article
226 of the Constitution, as it provided a separate cause of action. The
High Court, therefore, committed an error in entertaining his appli-
cation. [453D-E]
G
3. After the decision of the writ petition it was open to the State
Government to have taken up proceedings against the respondent from
the stage at which it was found to be vitiated. Had the respondent not
retired from service the State Government could have passed orders awar-
ding punishment to him after issuing a fresh show cause notice. [449D] H
446 SUPREME COURT REPORTS [1987] 2 S.C.R.

A 4. Merely because a Government servant retires from service on
attaining the age of superannuation he cannot escape the liability of
misconduct and neligence or fmancial irregularities. There were serious
allegations of misconduct against the respondent which had been pro-
ceeded against him during inquiry. Those charges remained alive even
after quashing of the dismissal order. Since no disciplinary proceedings
B could be taken as he had retired from service, the Government pro-
ceeded to take action against him under the Civil Service Regula-
tions. [451C; 449F]
5.1 Pension is not bounty, instead it is a right to property earned
by the Government servant on his rendering satisfactory service to the - ---(" ~
State. Article 470(b) of the Civil Service Regulations vests power in the
C ·appointing authority to take action for imposing reduction in pension.
As the State Government is the appointment authority in the instant case it
was competent to issue show caui;e notice to the respondent. [4SOF; 452G] ~
5 .2 If disciplinary ..proceedings against an employee of the
Government are initiated in respect of misconduct· committed by him
D and if he retires from service before the completion of the proceedings,
it is open to the State Government to direct reduction in his pension on
the proof of the allegations made against him. If the charges are not
established during the disciplinary proceedings or if the disciplinary
proceedings are quashed it is not permissible to the State Government
to direct reduction in the pension on the same allegations, but if the
E disciplinary proceedings could not be completed and if the charges of
serious allegations are established, which may have bearing on the
question of rendering efficient and satisfactory service, it would be open
to the Government to take proceedings against the Government servant
and to withhold or reduce the amount of pension in accordance with the
statutory rules. If the Government incurs pecuniary loss on account of '
F 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 pro-
ceedings, and if in those proceedings he is found guilty of misconduct,
negligence or any other such act or commission as a result of which
Government is put to pecuniary loss, the State Government is entitled
G to withhold, reduce or recover the loss suffered by it by forfeiture or
reduction of pension. [449H; 450-A-B; D-F]

5.3 Art. 311(2) of the Constitution is not attracted, nonetheless
the Government servant is entitled to opportunity of hearing before
order for reduction in pension is issued, as it would affect his right to
1-i receive full pension. [452B]
STATE OF U.P. v. B.D. SHARMA [SINGH, J.] 447

5.4 It would be open to the State Government to consider the A
respondent's reply to the show cause notice and proceed with the matter
in accordance with law. [453G]

State of Punjab v. K.R. Erry and Sobhag Rai, Mehta, [1973] 2
SCR 405; Deokinandan Prasad v. State of Bihar & Ors., [1971] Suppl.
SCR 634; D.S. Nakara and Ors., v. Union of India, [1983] 2 SCR 165; B
M. Narasimhachar v. State of Mysore, [1960] 1 SCR 981 and State of
~ Punjab & Anr. v. Iqbal Singh, [1976] 3 SCR 360, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 481
-_, ~-- of 1987.

From the Judgment and Order dated 11.7.1986 of the Allahabad
c
High Court in W.P. No. 8249of1980.

Anil Dev Singh and Mrs. S. Dikshit for the Appellant.

Ashok Grover and Pramod Dayal for the Respondents. D

The Judgment of the Court was delivered by

SINGH, J. Leave granted.

This appeal is directed against the order of the High Court of E
Allahabad quashing the State Government's Notice dated 29.1.86
issued under Art. 470(b) of the Civil Service Regulations calling upon
the respondent to show cause as to why his pension and gratuity be not
forfeited.

Relevant facts giving rise to this appeal are necessary to be re- F
captulated. Brahm Datt Sharma was employed as an Executive
Engineer in the Irrigation Department of the State of Uttar Pradesh.
A number of charges were framed against him and after departmental
inquiry charges were found proved consequently. He was dismissed
from service by the State Govt. 's Order dated November 10, 1972. He
unsuccessfully challenged the validity of the Order before the U .P. G
Public Service Tribunal. Therefore he filed a writ petition under Art.
226 of the Constitution before the High Court challenging the order of
dismissal. A single Judge of the High Court Allahabad by his Order
dated 10.8.84 set aside the order of the Tribunal and quashed the State
Government's Order dismissing the respondent from service on the
ground that he had not been afforded reasonable opporrunity of H
'
448 ' SUPREME COURT REPORTS [1987] 2. S.C.R.

A defence in as much as the recommendation made by the inquiry officer
~elating to the quantum of punishment against the petitioner had not ;;,
been communicated to him. While allowing the writ petition the I
learned single Judge made the following observations:

"I am informed by the learned counsel for the petitioner
B that the petitioner has now reached the age of superan-
nuation during the pendency of the petition in the High'
Court, consequently no reinstatement can be ordered
today. The petitioner will, however, be entitled to receive
all the benefits which he would be entitled treating him as
having been in service from the date of dismissal till the
date of superannuation. The petitioner wiU also be en-
c titled to receive the pensionary benefits which will be
admissible to him as if he continued in service till the date
of superannuation. It will be open to the respondents to
draw fresh proceedings if it is permissible to do so."

D The respondent had already retired from service during the
pendency of the petition before the High Court. On attaining the age
of superannuation disciplinary proc~edings could not be taken against
him. The State Govt. however issued a notice dated 29.1.86 to him
calling upon him to show cause as to why orders for forfeiture of his
pension and gratuity be not issued in accordance with Art. 470{b) Civil
E Service Regulation as his services have not been who Uy satisfactory.
The notice contained allegations of misconduct against the respondent
regarding financial irregularities committed by him. The respondent
submitted a reply to the notice but before the same could be examined
or a decision could be taken by the Govt. he filed an application before
the High Court in Writ Petition No. 82449 of 1980 which had already
F been finally disposed of on 10.8.84. By his Order dated July 11, 1986
the learned single Judge of the High Court held that since the depart-
mental proceedings taken against the respondent had already been
quashed, it was not open to the State Govt. to issue show cause notice
under Art. 470{b) of Civil Service Regulations, on those very allega-
tions which formed charges in the disciplinary proceedings. The
G Learned single Judge quashed the show cause notice and directed the
State Govt. to pay arrears of salary, pension and other allowances to
the respondent.

The question which falls for cosideration is whether notice dated
29.1.86 was invalid and liable to be quashed. The learned single Judge
H of the·High Court quashed the notice on the , sole ground that the
STATE OF U.P. v. B.D. SHARMA [SINGH, J.] 449

allegations specified in the show cause notice were the same which had
A
been the subject matter of departmental inquiry resulting in the
·respondent's dismissal from service, and since dismissal order had
been quashed in the writ petition, it was not open to the State Govt. to
take proceedings for imposing any cut in the respondent's pension on
the same set of charges. We do not agree with the view taken by the
High Court. While quashing the order of dismissal the learned Judge B
did not quash the proceedings or the charges instead; he had quashed
dismissal order merely on the ground that the respondent was not
afforded opportunity to show cause against the proposed punishment

- as the recommendation with regard to the quantum of punishment
made by the Inquiry Officer had not been communicated to him. In
fact while allowing the writ petition the learned single Judge himself
observed in his order dated 10.8.84 that it would be open to the State
c
Govt. to draw fresh proceedings if it was permissible to do so. The
High Court did not enter into the validity of the charges or the findings
recorded against the respondent during the inquiry held against him.
After the decision of the writ petition, it was open to the State Govt. to
have taken up proceedings against the respondent from the stage at D
which it was found to be vitiated. Had the respondent not retired from
service on attaining the age of superannuation it was open to the State
Govt. to pass order awarding punishment to him after issuing a fresh
show cause notice and supplying to him a copy of the recommendation
made by the Inquiry Officer. There was no legal bar against the State
Govt. in following such a course of action. There were serious allega- E
tions of misconduct against the respondent which had been proceeded
against him during inquiry, those charges remained alive even after
quashing of the dismissal order and it was therefore open to the State
Govt. to take action against the respondent in accordance with the
rules. No disciplinary proceedings could be taken as the respondent
~ had retired from service, the Govt. therefore considered it appropriate F
to take action against him under Art. 470 of Civil Service Regulations.
The Regulation vests power in the appointing authority to take action
for imposing reduction in the pension, as the State Govt. is the ap-
pointing authority it was competent to issue show cause notice to the
respondent. The notice specified various acts of omissions and com-
missions with a view to afford respondent opportunity to show that he G
had rendered throughout satisfactory service and that the allegations
made against him did not justify any reduction in the amount of pen-
sion. If disciplinary proceedings against an employee of the Govt. are
initiated in respect of misconduct committed by him and if he retires
from service on attaining the age of superannuation, before the com-
pletion of the proceedings it is open to the State Govt. to direct deduc- H
'

450 SUPREME COURT REPORTS [1987J 2 S.C. R.

A ti on in his pension on the proof of the allegations made against him. If
the charges are not established during the disciplinary proceedings or ,y
if the disciplinary proceedings are quashed it is not permissible to the 1
State Govt. to direct reduction in the pension on the same allegations,
but if the disciplinary proceedings could not be completed and if the
charges of serious allegations are established, which may have bearing
B on the question of rendering efficient and satisfactory service, it would
be open to the Govt. to take proceedings against the Govt. servant in
accordanace with rules for the deduction of pension and gratuity. In
this view the High Court committed error in holding that the show
cause notice was vitiated.

C Grant of pension to employees of the State Government is
regulated by the Civil Service Regulations which have statutory
character. Article 348-A provides that pension shall be granted subject
to the conditions contained in the Regulations. Article 351-A
empowers the Governor to withhold or withdraw pension or any part
of it, whether permanently or for a specified period and also to order
D recovery from pension of the whole or part of the pension for any
pecuniary loss caused to the Gover~ment if the pensioner is found
guilty in departmental or in judicial proceedings for any misconduct or
negligence during his service. Article 353 lays down that no pension
shall be granted to an officer dismissed or removed from service for
misconduct, insolvency or inefficiency, but compassionate allowance
E may be granted on special consideration. The claim of pens!on is de-
termined by length of service, as provided by Article 474 to 485. Full
pension is admissible under the rules not as a matter of course but only
if the service rendered by the Government employee is approved. The
Regulations empower the authority sanctioning the peosi0n to make
such reduction in the amount of pension as it may think proper. These
F provisions indicate that a Government servant is enlitled to pension
but the claim of pension is determined in accordance with the statutroy
rules. No doubt pension is no more a bounty; instead it is a right
earned by the Government servant on the basis of length of service,
nonetheless grant of full pension depends on the approval of service
rendered by the employee. In other words if the service rendered by
G the Government servant has not been satisfactory he would not be
entitled to full pension and it would always to open to the Govt. to
withhold or reduce the amount of pension in accordance with the
statutory rules. If the Government incurs pecuniary loss on account of
misconduct or.negligence of a Govt. servant and if he retires from
service before any departmental proceedings are taken against him, it
' H is open to the State Govt. to initiate departmental proceedings, and if
STATE OF U.P. v. B.D. SHARMA [SINGH. J.i 451

in those proceedings he is found guilty of misconduct, negligence or A
any other such act or omission as a result of which Govt. is put to
pecuniary loss, the State Govt. is entitled to withhold, reduce or re-
cover the loss suffered by it by forfeiture or reduction of pension,
These provisions ordain the Govt. servant to perform his duties faith-
fully and honestly. Honest and devoted service rendered by a Govt.
servant ensures efficiency in public administration. The statutory rules B
therefore contain provisions for the forfeiture and deduction in the
I pension of Govt. servant who have not rendered satisfactory service or
who have been found guility of misconduct or negligence resulting in
pencuniary loss to the Govt. Merely because a Govt. servant retires
from service on attaining the age of superannuation he cannot escape
the liability of misconduct and neligence or financial irregularities.
c
Art. 470 of the Civil Service Regulation reads as under:

I "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 D
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. E

Provided that in cases where the authority sanctioning pen-
sion is other than the appointing authority, no order re-
garding reduction in the amount of pension shall be made
without the approval of the appointing authority.
F
Note: For the purpose of this Article 'appointing autho-
rity' shall mean the authority which is competent to make
substantive appointment to the post or service from which
the officer concerned retires."

A plain reading of the regulation indicates that full pension is not G ·
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. Pro-
viso·to the regulation lays down that no order regarding reduction in H
452 SUPREME COURT REPORTS [1987] 2 S.C.R.

the amount of pension shall be made without the approval of the
A
appointing authority. Though the Regulations do not expressly pro-
vide 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. servant before any order is passed. Art. 311(2) is not attracted,
B nonetheless the Govt. servant is entitled to opportunity of hearing as
the order of reduction in pension affects his right to receive full pen-
sion. 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. In State of Punjab v. K.R. Erry and
Sobhag Rai Mehta, [1973] 2 SCR 405 this Court held that the State
Govt. could not direct cut in the pension of officers without giving a
c reasonable opportunity of hearing to them. In Deokinandan Prasad v.
State of Bihar & Ors., [1971] Suppl. SCR 634 it was held that pension is
not bounty payable at the sweet will and pleasure of the Govt.; instead
the right to pension is valuable right vested in a Govt. servant. Again
in D.S. Nakara and Ors. v. Union of India, [1983] 2 SCR 165 this
D Court held that payment of pension does not depend upon the discretion
of the Govt. but it is governed by the rules and Govt. servant coming
under those rules is entitled to claim pension. A Govt. employee earns his
pension by rendering long and efficient service, the claim of pension is
regulated by rules, which provide for reduction in the amount of pension
if the Govt. servant has failed to render efficient service. In M.
E Narasimhachar v. State of Mysore, [1960] 1 SCR 981 this Court upheld
the order of the State Govt. in reducing pension of a Govt. employee
as the rules regulating the grant of pension made provision for reduc-
tion of pension on account of his having rendered unsatisfactory
servic~. Rule 6.4 of Punjab Civil Pension Rules provides for the reduc-
tion in the amount of pension if the service of the Govt. employee has
F not been thoroughly satisfactory. The State Govt.'s order directing
reduction of pension of the employee of State of Punjab were set aside
by this Court in State of Punja,b v. K.R. Erry and Sebhag Rai Mehta
(Supra) and in State of Punjab & Anr. v. Iqbal Singh, [1976] 3 SCR 360
on the ground that the orders imposing deduction in the pension had
been passed in violation of principles of natural justice as the affected
G employees bad not been afforded opportunity of hearing. These deci-
sions leave no scope for any doubt that the State Govt. is competent to
direct reduction in pension after affording opportunity of hearing to
the Govt. servant.

The High Court was not justified in quashing the show cause
H notice. When a show cause notice is issued to a Govt. servant under a
STATE OF U.P. v. B.D. SHARMA [SINGH, J.] 453

statutory provision calling upon him to show cause, ordinarily the A
' ....,. Govt. servant must place his case before the authority concerned by
showing cause and the courts should be reluctant to interfere with the
notice at that stage unless the notice is shown to have been issued
palpably without any authority of law. The purpose of issuing show
cause notice is to afford opportunity of hearing to the Govt. servant
and once cause is shown it is open to the Govt. to consider the matter
B
in the light of the facts and submissions placed by the Govt. servant
and only thereafter a fin'BI decision in the matter could be taken.
Interference by the Court before that stage would be premature. The
High Court in our opinion ought not have interefered with the show
cause notice.
c
The High Court's order is not sustainable for yet another reason.
Respondents' writ petition challenging the order of dismissal had been
finally disposed of on 10.8.1984, thereafter nothing remained pending
before the High Court. No miscellaneous application could be filed in
the writ petition to revive proceedings in respect of subsequent events D
after two years. If the respondent was aggrieved by the notice dated
29.1.86 he could have filed a separate petition under Art. 226 of the
Constitution challenging the validity of the notice as it provided a .
separate cause of action to him. The respondent was not entitled to
assail validity of the notice before the High Court by means of a
miscellaneous application in the writ petition which had already been
decided. The High Court had no jurisdiction to entertain the applica- E
tion as no proceedings were pending before it. The High Court com-
mitted error in entertaining the respondent's application which was
founded on a separate cause of action. When proceedings stand
terrninated by final disposal of writ petition it is not open to the Court
to reopen the proceedings by means of a miscellaneous application in F
• -~ respect of a matter which provided a fresh cause of action. If this
principle is not followed there would be confusion and chaos and the
finality of proceedings would cease to have any meaning.

We accordingly allow the appeal, set aside the order of the High
Court dated 10.8.84. It would be open to the State Government to
consider the respondents reply to the show cause notice and proceed G
..-+ with the matter in accordance with law. In the circumstances of the
case parties shall bear their own costs.

P.S.S Appeal allowed.