Holding

The High Court’s directions to pay the pension were unsustainable because pending forfeiture proceedings under Regulation 16(a) must be decided first, and there is no inconsistency between Section 71(h) of the Army Act and Regulation 16(a) of the Pension Regulations.

Summary

Brigadier P.K. Dutta retired in 1991 and claimed his pension and other retiral benefits, which had not been paid. While his claim was pending, a General Court Martial in 1992 sentenced him to three years' rigorous imprisonment and cashiered him, a decision later confirmed by the Chief of Army Staff. The Delhi High Court, relying on the principle that cashiering alone does not forfeit pension, directed the Union of India to pay the benefits within a month, without noting that forfeiture proceedings under Regulation 16(a) of the Pension Regulations were already underway. The Supreme Court held that the High Court’s directions were unsustainable because the pending forfeiture proceedings must be decided first, and found no inconsistency between Section 71(h) of the Army Act and Regulation 16(a). It ordered that the forfeiture proceedings be concluded within six months, after which either the High Court’s directions would take effect or the respondent’s right to benefits would be subject to the forfeiture order. The appeal was allowed in favour of the Union of India.

Issues considered

Whether the High Court could direct payment of retirement benefits when forfeiture proceedings under Regulation 16(a) of the Pension Regulations were pending.
Whether Section 71(h) of the Army Act is inconsistent with Regulation 16(a) of the Pension Regulations.
Whether non‑statutory Pension Regulations can lawfully provide for forfeiture of pensionary benefits.
Whether Army Rule 14 has any bearing on the forfeiture of pension.

Legislation cited

Army Acts. 71(h), s. 71(k)
Army Ruless. 14
Pension Regulationss. 16(a)

Subjects

Army ActPension Regulationsforfeiture of pensioncashieringcourt martialretirement benefitsadministrative lawnon‑statutory regulations

Judgment

A UNION OF INDIA AND ORS.
v.
BRG.P.K.DU1TA(RETD)

DECEMBER 7, 1994

B [B. P. JEEVAN REDDY AND SUJATA V. MANOHAR, JJ.]

Army Act/Army Rules/Pension Regulations : Section 71/Rule 14116
(a)- Court Martial just after superannuation-Retiral benefits not paid- ·
High Court directing payment-Pendency of proceedings for forfeiture of
pensions noi specifically mentioned before High Court-However, mention
c of it found in the counter affidavit filed in the High Court-Directions
issued for concluding the proceedings within one month failing which
directions of High Court would be given effect to--Jf orders passed within
the stipulated period, retiral benefits would be subject to such orders-Held
: No inconsistency between Section 71 (h) and regulation 16 (a).
D
Respondent joined the Army as a Commissioned Officer in 1960.
He rose to the rank of Brigadier and retired on December 31, 1991 on
attaining the age of superannuation. Since the retiral .benefits due to
him were not paid, he laid a claim therefore. In January · 1992,
disciplinary proceedings were initiated against him. He was tried by a
E General Court Martial and awarded three years rigorous
imprisonment and was also cashiered. These findings were confirmed
by the Chief of the Army Staff and became final.

Respondent approached the High Court by way of a writ Petition.
The High Court held that cashiering by itself could not result in
F forfeiture of the retria.1 benefits, and issued directions to the Union of
India to disburse within one month the retiral benefits such as pension ,
gratuity etc. as permissible under the rules. Union of India has
preferred the present appeal.

The appellants contended that proceedings for forfeiture of retiral
G benefits as contemplated by Regulation 16 (a) of the Pension
Regulations, were indeed initiated and were pending, which fact was
brought to the knowledge of the High Court and yet the directions were
issued.

H Disposing of the appeal, this Court
358
U. 0. I. v. P. K. DUTT A 359

HELD : 1. It appears that pendency of proceeding for forfeiture of A
retiral benefits was not specifically brought to the notice (>f the High
Court. Had it been so brought to its notice, the High Court would not
have made the directions. But having regard to the crucial relevance of
the said averment and in the facts and circumstances of the case, this
Court is inclined to take note of the statements in the counter affidavit
to the above effect. Once this is so, it should follow that the directions B
given by the High Court become unsustainable in law. At the same time
the proceedings initiated under Regulation 16 (a) have to be directed to
be disposed of expeditiously. (361 A, G, H, 362 A)

2. Regulation 16 (a) of the Pension Regulations contemplates a
situation where an officer is cashiered dismissed or removed from C
service and provides how his pension is to be dealt with. Whereas
Section 71 (h) provides the punishment which can be awarded by the
Court Martial, at the conclusion of the Court Martial, Regulation 16
(a) contemplates a stage -subsequent to the awarding a punishment by
Court Martial and its confirmation. The nature and content of both the
impositions is altogether different and distinct. So is the field occupied D
by clause (k) of section 71 wholly distinct from Regulation 16 (a).
Therefore, there is no inconsistency between Section 71 (h) and
Regulation 16 (a). [363 A to CJ

3. It is true that the Pension Regulations are non-statutory in
character. But as held by this Court in Civil Appeal No. 831 of 1993
disposed of on July 26, 1994, the pensionary benefits are provided for E
and are payable only under those Regulations and can, therefore, be
withheld or forfeited, as provided by these very Regulations. Army
Rule 14 has absolutely no relevance on this aspect. (363 C, D, G)

4. It is directed that:
F
(i) The proceedings initiated under Regulation 16 (a) shall be
concluded within six months. This time limit is fixed in view of the fact
that the proceedings are said to have been initiated even by the time the
counter affidavit was filed in the High Court. (364 A)

(ii) If no orders are passed under Regulation 16 (a) of the Pension G
Regulation within the aforesaid period, the directions of the High
Court shall be given effect to. (364 BJ

(iii) In case orders are ·passed under Regulation 16 (a) within the
aforesaid period, the right of the respondent to receive retiral benefits
shall be subject to such orders. (364 C] H
360 SUPREME COURT REPORTS [1994] SUPP. 6 S.C.R

A CIVIL APPELLATE JURlSDICTION: Civil Appeal No. 8948 of
1994.

From the Judgment and Order dated 24.5.94 of the Delhi High Court in
C. W. P. No. 5414of1993.

B V.R. Reddy, Additional Solicitor General, P.P. Malhotra, W.A. Qadri,
A.K. Srivastava and Mrs. Anil Katiyar for the appellants.

B.P. Ojha and Manoj Prasad for the Respondent.

The Judgement of the CoUrt was delivered by
c
B.P. JEEVAN REDDY, J. Leave granted.

Heard learned Additional Solicitor General for the appellant-· Union
of India and the learned counsel for the respondent. The appeal is preferred
against the judgement of the Delhi High Court allowing the writ petition
D filed by the respondent and directing the Union of India to disburse the
retiral benefits such as pension, gratuity etc., as permissible under the Rules
to him within one month from the date of the judgement. It was furt.'ler
oirected that the respondent's claim for payment in respect of encashment of
202 days annual leave shall be dealt with and decided in accordance with
E the Rules and the amount found payable shall be paid to him within the
same period. The claim for interest on the said amounts was however
rejected.

The respondent joined the Army as Commissioned Officer on June 12,
1960. He earned promotions in due course and retired in the rank of
F Brigadier on December 31, 1991 on attaining the age of superannuation.
Since the retiral benefits due to him were not paid, he laid a claim therefor.
While so, in January 1992, disciplinary proceedings were initiated against
him. He was tried by a General Court Martial and awarded three years
rigorous imprisonment and was also cashiered. The findings of the Court
Martial were confirmed by the Chief of Army Staff and have become final.
G Since the retiral benefits were not paid to him, he approached the Delhi
High Court by way of Writ Petition No. 5414 of 1993. The High Court
held, following the decision of this Court in Major G. S. Sodhi v. Union of
India, [1991] 2 SCC 371; that cashiering does not by itself result in
forfeiture of the retiral benefits and accordingly allowed the Writ Petition
and gave the directions aforementioned.
H
U. 0. I. v. P. K. DUTTA [B.P. JEEVAN REDDY, J.) 361

The learned Additional Solicitor General, Shri V. R. Reddy, submits A
that the Delhi High Court was in error in giving the directions
aforementioned in view of the pendency of the proceedings for forfeiture of
retiral benefits as contemplated by Regulation 16 (a) of the Pension
Regulations. This fact is, however, not referred to or mentioned in the
judgement of the High Court. In the ordinary course we would not have
allowed the appellant to raise this plea but we find that in the counter B
affidavit filed by the Union of India in the Delhi Court, this fact was clearly
stated at two places. The following statements in the counter affidavit bear
it out:

"It is further submitted that encashment of leave is not
permissible under rule because of his involvement in C
disciplinary proceedings. Copy of Government of Ind.ia letter
dated 20 August, 1990 attached as Annexure R-1 in the face
of filing this W. P., the provisional Penison being paid to
officer has not been stopped though it should have been
stopped and action should have been initiated for exercising
the discretion of the competent Authority i.e., the President. D
The action has been initiated."

(emphasis added)

Again:
E
"It is further submitted that case the disciplinary proceedings
are completed /concluded, the operation of Reg GB causes its
operation and pension case of the petition has to be regulated
under the provision of Reg 16 (a) of ARA Pt-I 1961 for issue
of discretionary power of the President for grant or otherwise
of pensionary benefits. The case has been initiated for the F
same."

(emphasis added)

It appears that this aspect was not specifically brought to the notice of
the High Court. Had it been so brought to its notice, we are sure the High G
Court would not have made the directions in the manner complained of. But
having regard to the crucial relevance of the said averment and in the facts
and circumstances of the case, we are inclined to take note of the said
statements in the counter affidavit. Once this is so; it should follow that the
directions as given by the High Court become unsustainable in law. At the
same time the proceedings initiated under Regulation 16 (a) have to be H
362 SUPREME COURT REPORTS [1994] SUPP. 6 S.C.R

A directed to be disposed of expeditiously. But before we make the final
directions it is necessary to deal with the contentions raised by the learned
counsel for the respondent. He urged the following contentions: Regulation
16 (a) of the Pension Regulations has no statutory force. The said
Regu.lations are administrative in nature. They cannot run counter to or be
inconsistent within the Army Act or the Rules made thereunder. Section 71
B (h) of the Army Act indicates that forfeiture of retiral benefits is one of the
punishments that can be awarded by the Court Martial itself. In view of the
said statutory provision the Regulation cann·ot empower another authority
to impose the said punishment. Rule 14 of the Army Rules too supports the
above proposition, says the counsel. We are of the opinion that none of the
said contentions merits acceptance. Section 71 specifies the punishments
c that can be awarded by the Court Martial. They include the punishment of
death, imprisonment for life, cashiering, dismissal from service , reduction
in rank, forfeiture of seniority of rank, forfeiture of pay and allowances and
so on. One of the punishments which can be awarded is mentioned under
clause (h). Sections 71 (h) and (k) read as follows:
.'
D "71 Punishment awardable by Courts-Martial- Punishment '
.I

may be inflicted in respect of offences committed by person
subject to this Act and convicted by Court Martial, according
to the scale following, that is to say: ..... .

(h) forfeiture of service for the purpose of~increased pay,
E pension or any other prescribed purpose:

(k) forfeiture in the case of a person sentenced to cashiering
or dismissal from the service of all arrears of pay and
allowances and other public money due to him at the time of
such cashiering or dismissal: ..... "
F
We are of the opinion that clause (h) of Section 71 contemplates
forfeiture of service for the purpose of increased pay, pension or any other
prescribed purpose and is wholly different from Regulation 16 (a), which
reads thus:
G "16 (a) When an officer who has to his credit the minimum
period of qualifying service required to earn pension, is
cashiered or dismissed or removed from service, his pension,
may at the discretion of the Presidell;t/be forfeited or be
granted at a rate not exceeding that for which he would have
otherwise qualified had he retired on the same date."
H
U. 0.1. v. P. K. DUTTA [B.P. JEEVAN REDDY, J.] 363

A reading of both the provisions clearly brings out the distinct field!: A
occupied by them. Regulation 16 (a) contemplates a situation where an
officer is cashiered, dismissed or removed from service and provides how
his pension is to be dealt with. Whereas Section 71 (h) provides the
punishments which can be awarded by the Court Martial. Section 71 (h)
contemplates a punishment awarded as the conclusion of the Court Martial
while Regulation 16(a) contemplates a stage subsequent to the awarding of B
punishment of Court Martial and its confirmation. The nature and content
of both the impositions is altogether different and distinct. So is the field
occupied by clause (k) of Section 71 wholly distinct from Regulation I 6(a).
We are, therefore unable to see any inconsistency between Section 71 (h)
and Regulation 16 (a). C

It is true that the Pension Regulations are non-statutory in character.
But as held by this Court in Civil Appeal No. 831 of 1993 disposed of on
July 26, 1994, the pensionary benefits are provided for and are payable
only under those Regulations and can, therefore, be withheld or forfeited
under and as provided by those very Regulations. The following holding D
from .the said Judgment make the position clear :

"We do not agree even with the second contention advanced
by the learned counsel. The provisions of Regulation 16 (a)
are clear. Even if it is assumed that the Pension Regulations
have· no statutory force. We fail to understand how the E
provisions of the said Regulations are contrary to the
statutory provisions under the Act or the Rules. The pension
has been provided under these regulations. It is not disputed
by the learned counsel that the pension was granted to the
appellant under the said regulations. The regulations which F
provided for the grant of pension, can also provide for taking
it away on justifiable grounds. A show cause notice was
issued to the appellant. His reply was considered and
thereafter the President passed the order forfeiting the
pension and death cum retirement gratuity. We see no
infirmity in the order." G
We may also mention that Army Rule 14 has absolutely no relevance
on this aspect.

In view of the above, the appeal is allowed with the following
directions: H
364 SUPREME COURT REPORTS (1994] SUPP. 6 S.C.R

A (I) The proceedings initiated under Regulation I 6 (a) shall be
concluded within six months from today. This time limit is fixed in view of
the fact that the proceedings are said to have been initiated even by the time
the counter affidavit was filed in the High Court (The Counter affidavit was
sworn to on 15theApril 1994.)

B (2) If no orders are passed under Regulation 16 (a) of the Pension
Regulations within the aforesaid period, the directions of the High Court
shall be given effect to.

(3) In case orders are passed under Regulation 16 (a) within the
aforesaid period, the right of the respondent to receive retiral benefits shall
c be subject to such orders.

The appeal is disposed of in the above terms. There shall be no order as
to costs.

G.N. Appeal dispossed of.