New Delhi, Aug. 17:The Supreme Court has ruled that governments cannot withhold by an administrative order pension, gratuity and leave encashment benefits from employees facing criminal or departmental probes as such benefits fall under the “right to property” the Constitution guarantees.
A two-judge bench said the benefits could be withdrawn or withheld only if statutory rules provide for such steps.
“It is an accepted position that gratuity and pension are not … bounties. An employee earns these benefits by dint of his long, continuous, faithful and unblemished service,” the court said, adding the “hard earned benefit” that accrues to an employee was in the nature of “property”.
“This right to property cannot be taken away without the due process of law as per the provisions of Article 300A of the Constitution of India,” the court said.
Article 300A says persons cannot be deprived of property “save by (the) authority of law”.
The recent ruling by a bench of Justices K.S. Radhakrishnan and A.K. Sikri came as it dismissed a Jharkhand government appeal against an order by the state’s high court.
The high court had said the state couldn’t withhold pension, gratuity and leave encashment benefits if an employee facing criminal/departmental proceedings had attained superannuation while the proceedings were still on.
In this case, the employee, Jitendra Kumar Srivastava, had joined the animal husbandry and fisheries department under the government of (undivided) Bihar in November 1966. On April 16, 1996, two cases were registered against him under the Indian Penal Code and the Prevention of Corruption Act for alleged financial irregularities between 1990 and 1992. Srivastava retired on August 31, 2002, while the proceedings against him were still pending.
The Jharkhand government sanctioned 90 per cent provisional pension. The remaining 10 per cent and Srivastava’s salary during his suspension period — 30.1.2002 to 30.8.2002 — were withheld, pending the outcome of the criminal cases/departmental inquiry against him. He was also not paid leave encashment and gratuity.
The high court directed the government to pay Srivastava the full amount. The state then appealed in the apex court.
Under Rule 43(a) and 43(b) of the Bihar Pension Rules, the government has no power to withhold an employee’s gratuity and pension during the pendency of departmental or criminal proceedings. Nor can leave encashment be withheld at any stage either prior to the proceedings or after their conclusion. Such steps can be taken only if the employee is convicted or held guilty in the departmental proceedings.
The apex court said Rule 43(b) made it clear that even after conclusion of the departmental inquiry, the government could withhold benefits like pension only when a finding had been recorded that the employee had committed grave misconduct in the discharge of his duties while in office.
“There is no provision in the rules (Bihar Government Employees Service rules) for withholding of the pension/gratuity when such departmental proceedings or judicial proceedings are still pending,” the court said.
Justice Sikri, who wrote the judgment, cited an earlier ruling by the court to say the right to receive pension was recognised as “right to property” by a Constitution bench judgment in 1971.
The court said a person couldn’t be deprived of his pension without the authority of law and added that it “hardly needs to be emphasised” that executive instructions don’t have statutory character and, therefore, couldn’t be termed “law” within the meaning of Article 300A.