UNION OF INDIA & ANR. vs. S.K. GUPTA

* IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on: 18.04.2016
Pronounced on: 03.06.2016

+ WP(C) 11860/2015

UNION OF INDIA & ANR. ..... Petitioner
Through: Mr. Ruchir Mishra & Mr. Mukesh
Kumar Tiwari, Advs.

Versus

S.K. GUPTA .... Respondent
Through: Respondent in person.

CORAM:
HON’BLE MR. JUSTICE SANJIV KHANNA
HON’BLE MR. JUSTICE NAJMI WAZIRI

NAJMI WAZIRI, J


1. This writ petition impugns the order dated 20.02.2015 of the Principal
Bench of the Central Administrative Tribunal in OA No. 3726/2013, which
has, inter alia, observed that since the respondent on attaining the age of
superannuation was allowed to retire without any objection, hence his earlier
period of suspension got automatically revoked and the relationship of
master and servant came to an end. Consequently, the petitioners
(employer) would have no jurisdiction to pass any further orders, and
therefore, the order dated 13.09.2013, which was passed after the
superannuation was not sustainable. The Tribunal quashed the said order.
The petitioner was directed to regulate payment of the respondent‟s pension
WP(C) 11860/2015 Page 1 of 13



and other terminal benefits including full gratuity and leave encashment. It
stands directed that the petitioners would:-
“….. consider paying him the composite transfer grant,
transportation charges for personal effects and car and air
tickets for setting at Godnia, Maharashtra in accordance with
st
the rules. If the Respondents have withheld his salary for 1
nd
and 2 June, 2011 without any valid reason, it shall also be
paid to him. Further the applicant is entitled to get interest at
9% on all the aforesaid benefits withheld by them from the
respective dates they became due to the actual date of payment.
They shall also apply the item-wise calculation sheets for all
the payments to be made. Further, they shall pass appropriate
orders in the matter under intimation to him. The aforesaid
directions shall be complied with, within a period of 2 months
from the date of receipt of a copy of this order.….”
2. The facts of the case are that while working as Deputy Director
General in the Ministry of Statistics and Programme Implementation, a
criminal case under the provisions of the Prevention of Corruption Act,1988
was registered against the respondent. He was arrested and remanded to
judicial custody for more than 48 hours, whereupon he was deemed to have
been suspended from the date of his arrest i.e. 02.06.2012. He continued to
remain under suspension until he superannuated on 31.05.2012. Terminal
benefits under the head of CGEGIS, GPF and provisional pensions were
released to him in view of Rule 69 of the CCS (Pension) Rules, 1972 (for
short 1972 Rules). His request for gratuity and commutation of pension was
declined on the ground that till the conclusion of the departmental or judicial
proceedings were pending against him, the said benefits could not be
released in view of Rule 4 of the Central Civil Services (Commutation of
Pension) Rules, 1981 (for short 1981 Rules).
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3. Resultantly, the respondent had approached the Tribunal in the
aforesaid O.A. for payment of his post-retirement benefits, leave encashment
and gratuity etc. which was denied to him at the time of his retirement since
he was under suspension, on the ground that the leave account could not be
closed and a view in the matter would be taken only upon conclusion of the
criminal proceedings against him. The Tribunal has allowed the O.A. and
passed the directions as mentioned hereinabove. During the pendency of the
O.A., the leave encashment amount had been partly released for 254 days
amounting to Rs. 8,68,375/-. However, the respondent was not paid the 92
days half pay leave, composite transfer grant, transportation charges for
personal effects, care and air tickets for settling at Gondia, Maharashtra.
4. The Tribunal had relied upon the dictum of the Karnataka High Court
in R.S. Naik vs. State of Karnataka & Ors. 1982 (1) KarLJ 156, which held
that when a government servant was allowed to retire from service
voluntarily, the service relationship of master and servant ceased to exist as
there was severance of status. Therefore, any criminal prosecution already
launched or which could be launched against the former employee would not
alter his status, hence a subsequent order of revocation of suspension could
not arise. In such circumstances, the period of suspension could only be
treated as being on duty. The Tribunal further referred to the judgment of
this Court in S.P. Jain vs. Punjab National Bank and Anr. 1993 (25) DRJ
40 which had referred to R.S. Naik (supra) and held that on attaining of age
of superannuation, if the employer does not have any objection, the
relationship of master and servant ceases to exist. Consequently, the earlier
subsisting suspension order passed against the employee would cease to
WP(C) 11860/2015 Page 3 of 13



operate upon the retirement from service of the employee. The aforesaid
judgment also referred to the decision of the Supreme Court in H.L. Mehta
vs. Union of India & Ors. 1974 S.L.R. 379, which held that when an order
of suspension of an employee merges in the dismissal order and if
subsequently the dismissal order itself is set aside, then the suspension order
does not revive.
5. The Tribunal has also referred to the dictionary meaning of the term
„suspension‟ to connote “the action of debarring or state of being debarred,
especially for a time from a function of privilege, temporary deprivation of
one‟s office or position”. It also referred to the ratio of the Supreme Court
on the meaning of the term “suspension” in U.P. Rajya Krishi Utpadan
Mandi Parishad vs Sanjiv Rajan 1993 Supp. (3) SCC 483. To elucidate of
principle of „suspension‟ reference was made to decisions of the Supreme
Court in R.P. Kapur vs Union of India (1964) 5 SCR 431; Balvantray
Ratilal Patel vs State of Maharashtra (1968) 2 SCR 577; V.P. Gindroniya
vs State of Madhya Pradesh (1970) 3 SCR 448; and Union of India vs
Rajiv Kumar (2003) 6 SCC 516 on the effect of suspension and the
relationship of master and servant during the period of suspension.
6. Referring to Fundamental Rules 53(1) and 56 and the question
whether an employee‟s suspension period can be extended till he retires
from service or whether the suspended employee can be retired from service,
the Tribunal was of the view that an order of suspension gets automatically
revoked from the date on which the government servant is dismissed or
removed or compulsorily retired pursuant to departmental and/or court
proceedings or when criminal proceedings against the employee stand
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terminated with either an order of acquittal or discharge and the payment of
allowance due to him during the period of suspension is governed by FR
53(1), which holds that every government servant shall retire from service
on the date on which he attains the age of 60 years.
7. In order to examine and decide the contentions, we would like to
begin by referring to the prayers made in the O.A. which read:-
“(i) Quash and set aside the impugned order dated 13.-
09-2013;

(ii) The respondents be directed to release the leave
encashment, and full gratuity amounts along with
interest @ 18% (As per decision of Apex Court in case
of Vijay L. Mehrotra v. State of U.P. & Ors: JT 2000 (5)
SC 171).

(iii) The respondents be directed to pay composite
transfer grant, transportation charges for personnel
effects and car, and air tickets for settling at Gondia,
Maharashtra along with children of applicant after
retirement;

st nd
(iv) Pay withheld salary for 1 and 2 June, 2011;

(v) Cost of litigation; and

(vi) Any such further order as this Hon‟ble court
may deem fit and proper be also passed in favour of
applicant.

th
8. The first prayer made for quashing of letter dated 13 September,
2013 does not survive, as the said letter had disallowed and rejected the
request for payment of leave encashment equivalent to earned leave credited
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to the account of the respondent. As has been noticed in the impugned order
itself, an amount of Rs.8,68,375/- towards leave encashment of 254 days of
earned leave was paid to the respondent. The other reliefs relate to payment
of full gratuity, composite transfer grant, transportation charges for personal
effects and car, and air tickets for wife and children post retirement. The
respondent has not been paid 92 days half pay leave. Prayer for payment of
st nd
1 and 2 June, 2011 salary has also been made.
9. Sub-Rule (4) to Rule 9 of the Central Civil Services (Pension), Rules,
1972 (hereinafter referred to as „1972 Rules‟), reads as follows:-
“(4) In the case of Government servant who has
retired on attaining the age of superannuation or
otherwise and 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.”

Sub-rule (6)(b) to Rule 9 of the 1972 Rules, stipulates that “judicial
proceedings shall be deemed to be instituted”, for the purpose of this Rule,
when:-
“
(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 is
presented in the Court.”

10. A reading of the aforesaid sub-rule would show that on the date of
superannuation the respondent was facing judicial proceedings, which was
WP(C) 11860/2015 Page 6 of 13



instituted and pending. It is not the case of the respondent that the Court had
not taken cognizance of the report filed by the police officer. In terms of the
mandate of sub-rule (4) to Rule 9, we have to make reference to Rule 69 of
the 1972 Rules, which reads:-
“69. Provisional pension where departmental or
judicial proceedings may be pending
(1) (a) In respect of a Government servant referred to
in sub-rule (4) of Rule 9, the Accounts Officer shall
authorize the provisional pension equal to the maximum
pension which would have been admissible on the basis
of qualifying service up to the date of retirement of the
Government servant, or if he was under suspension on
the date of retirement up to the date immediately
preceding the date on which he was placed under
suspension.
(b) The provisional pension shall be authorized by
the Accounts Officer during the period commencing
from the date of retirement up to and including the date
on which, after the conclusion of departmental or
judicial proceedings, final orders are passed by the
competent authority.
(c) No gratuity shall be paid to the Government
servant until the conclusion of the departmental or
judicial proceedings and issue of final orders thereon :
Provided that where departmental proceedings have
been instituted under Rule 16 of the Central Civil
Services (Classification, Control and Appeal) Rules,
1965, for imposing any of the penalties specified in
Clauses (i), (ii) and (iv) of Rule 11 of the said rules, the
payment of gratuity shall be authorized to be paid to the
Government servant.
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(2) Payment of provisional pension made under sub-
rule (1) shall be adjusted against final retirement benefits
sanctioned to such Government servant upon conclusion
of such proceedings but no recovery shall be made
where the pension finally sanctioned is less than the
provisional pension or the pension is reduced or
withheld either permanently or for a specified period.”
11. Rule 69 specifically stipulates that the Accounts Officer shall
authorize provisional pension equal to the maximum pension which would
be admissible on the basis of qualifying service up to the date of retirement
or, in case, the person was under suspension on the date of retirement, up-to
the date immediately preceding the date on which he was placed under
suspension. The Rule, therefore, states that if a person was under suspension
on the date of retirement, the suspension period would not be included in the
qualifying service. Clause (c) to sub-rule (1) of Rule 69 states that no
gratuity will be payable to the government servant until conclusion of the
departmental or judicial proceedings and issue of final orders. Under sub-
rule (2), payment of provisional pension is subject to adjustment against final
retirement benefits to be sanctioned upon conclusion of proceedings, but no
recovery can be made where the pension initially sanctioned is less than the
provisional pension or the pension is reduced or withheld either permanently
or for a specified period.
12. On the said aspect, we would also like to refer to Rule 23 on the
question of counting of suspension period and determination of pension
based upon emoluments. The said Rule reads as under:-
“…23. Counting of periods of suspension
Time passed by a Government Servant under suspension
pending inquiry into conduct shall count as qualifying service
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where, on conclusion of such inquiry, he has been fully
exonerated or the suspension is held to t he wholly
unjustified; in other case, the period of suspension shall not
count unless the authority competent to pass orders under the
rule governing such cases expressly declares at the time is
shall count to such extent as the Competent Authority may
declare…”
13. A reading of Rule 23 would show that the suspension period can be
counted as qualifying period where the government servant is fully
exonerated on conclusion of inquiry or the suspension is held to be wholly
unjustified. In other cases, the period of suspension shall not be counted
unless and to the extent as the competent authority may declare.
14. When we harmoniously read the aforesaid provisions, it is crystal
clear that the suspension period does not evaporate and is not erased when
the government servant retires as in the present case. The respondent was
facing criminal prosecution. The judicial proceedings stood instituted on or
before the date of retirement. On the date of retirement, they were pending.
In such circumstances, Rule 9(4) of the 1972 Rules would apply with full
vigor and force. It will also mean that the period of suspension in terms of
Rule 23 will not be counted unless the competent authority passes an order
and declares the suspension period that shall be counted.
15. Retirement does put to an end the order of suspension for the reason
that employer and employee relationship ceases and comes to an end. Once
there is termination of the said relationship because the employee has
attained the age of superannuation, the suspension order cannot continue, for
suspension itself postulates existence of employer and employee
relationship. Retirement would not affect the earlier order of suspension and
the suspension order does not terminate the said employer-employee
WP(C) 11860/2015 Page 9 of 13



relationship (See, Section 16 of General Clauses Act, 1897). Reliance
placed on Rule 49(2) (a) and Rule 34 is inconsequential and not relevant for
the purpose present adjudication, for what is payable and paid is provisional
pension and not pension. Provisional pension/gratuity is provided in Rule 64
of the 1972 Rules. Payments have to be made as per Rule 69 read with Rule
64 of the 1972 Rules.
16. Fundamental Rule 54-B(1) makes a provision for the competent
authority to pass orders on pay and allowance to a government servant for
the period of suspension, upon being reinstated and not otherwise. Such
reinstatement, when post-retirement, would also mandate an order under FR
54-B(1). It would equally apply to cases of reinstatement after premature
retirement. In such cases, the competent authority should pass an order as to
whether or not the suspension period shall be treated as a period spent on
duty. The said rule reads as under:
“… FR 54-B(1) When a Government servant who has
been suspended is reinstated or would have been so
reinstated but for his retirement (including premature
retirement) while under suspension, the authority competent
to order reinstatement shall consider and make a specific
order –
(a) Regarding the pay and allowance to be paid to the
Government servant for the period of suspension ending with
reinstatement or the date of his retirement (including
premature retirement), as the case may be; and
(b) Whether or not the said period shall be treated as period
spent on duty….”
17. This Rule would not have any application as the respondent has not
been reinstated in service. The respondent, while on suspension, attained the
WP(C) 11860/2015 Page 10 of 13



age of superannuation. He was still facing judicial proceedings. Retirement
does not result in reinstatement; this is not the dicta of the Rule. The
Tribunal has erroneously opined that since the present petitioner had allowed
the respondent employee to retire on attaining the age of superannuation,
their relationship of master and servant ceased to exist and that the Tribunal
would resultantly have no jurisdiction to pass any consequent order. We
have referred to the Rule position under the 1972, Rules.
18. We are of the view that the S.P. Jain (supra) case would not be an
authority in the present case because of the nature of employment and the
applicable rules governing the employment and the master-servant
relationship in that case, and the present case are different. Reliance of the
Tribunal upon R.S. Naik (supra) too is erroneous because that case related
to a situation prior to the coming into force of Rule 4 of the CCS
(Commutation of Pension) Rules, 1981. It was a case of an employee
belonging to the State of Karnataka and the State Rules were applicable.
Rule 4 of the 1981 Rules read as under:
“4. Restriction on commutation of pension.
No Government servant against whom departmental or
judicial proceedings, as referred to in Rule 9 of the Pension
Rules, have been instituted before the date of his retirement, or
the pensioner against whom such proceedings are instituted
after the date of his retirement, shall be eligible to commute a
fraction of his provisional pension authorized under Rule 69
of the Pension Rules or the pension, as the case may be,
during the pendency of such proceedings.”
19. In V.Vadivelu v. The Deputy Registrar, Central Administrative
Tribunal Madras Bench, Chennai, The Union of India represented by
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Chief Post Master General, Tamil Nadu Circle, Chennai and The
Superintendent of Post Offices, Arakkonam Divison, Arokkonam, Vellore
District , Writ Petition No.12199 of 1999 pronounced on 14.02.2002, the
Madras High Court has held:

20. It would be extremely easy for a government servant to commit acts
of impropriety, which may or may not cause financial or other loss to its
employer, and consequently, being suspended on charge for such act and
irrespective of the outcome of such departmental or judicial proceedings, he
should comfortably walk into the sunset with full retirement benefits simply
because he was allowed to retire or superannuate from his service without
any objections. The aforesaid Rules deal with the delinquent employee
being granted full pensionary benefits merely upon his superannuation,
though he is facing disciplinary or judicial proceedings. 1981 Rules relating
to computation of pension were brought into force. Rules 9(4) and 69 of the
WP(C) 11860/2015 Page 12 of 13



1972 Rules are not under challenge. Its meaning and import is clear and
unambiguous. They govern the circumstances such as the present case,
where a government servant, against whom departmental or judicial
proceedings have been instituted before the date of his retirement, and
continue even after retirement. Indeed, the Rules clearly puts a restriction on
the commutation of full pension, etc. The pension has to be re-worked and
calculated on conclusion of the judicial proceedings.
21. In view of the above, we are of the opinion that the Tribunal had
misdirected itself by relying upon the dictum in R.S. Naik (supra), S.P. Jain
(supra) and H.L. Mehta (supra), each of which related to different facts and
situations and are, therefore, distinguishable. In the circumstances, the
impugned order cannot be sustained and is, accordingly, set aside. No
orders as to costs.

NAJMI WAZIRI, J



SANJIV KHANNA, J
JUNE 03, 2016
kk
WP(C) 11860/2015 Page 13 of 13