Pension cannot be wholly withheld upon conviction; Rule 2.2(a) limits withholding to one-third.

The applicant, a Senior Assistant in the Estate Office, Chandigarh Administration, was suspended in March 1999 while working in the Land Acquisition Branch.

A criminal case was subsequently registered against him under the IPC and the Prevention of Corruption Act, 1988.

He retired on superannuation on 31.12.2010 while the criminal proceedings were pending.

After retirement, he was sanctioned provisional pension from 01.01.2011 under the applicable Punjab Civil Services Rules.

Following his conviction by the Special Judge, Chandigarh, and sentencing on 19.08.2013, the Estate Officer passed an order dated 13.07.2016 withholding the applicant’s entire pension retrospectively from the date of conviction.

The applicant challenged the retrospective withholding and sought provisional pension, leave encashment, gratuity, revised subsistence allowance, full pay for the suspension period, revised retiral benefits and interest.

During the proceedings, his representation for retiral benefits was rejected on 18.09.2023 and his appeal against the pension-withholding order was rejected on 20.11.2023; both orders were brought under challenge by amendment.

Whether the respondents could withhold the applicant’s entire pension retrospectively from the date of his conviction under Rule 2.2(a) read with Rule 9.14 of the Punjab Civil Services Rules?

Whether the applicant was entitled to release of leave encashment merely because criminal proceedings were pending, or whether withholding was permissible only upon satisfaction of the conditions in Rule 8.21(aa)?

Whether the applicant was entitled to release of Death-cum-Retirement Gratuity while the criminal appeal against his conviction remained pending?

Whether the applicant was entitled to full pay and allowances or revised subsistence allowance for the period of suspension and to consequential revision of retiral benefits?

The Tribunal applied Rule 2.2(a) of the Punjab Civil Services Rules, Volume II, under which pension may be withheld or withdrawn, wholly or partly, for conviction of a serious crime or grave misconduct, but the amount withheld should ordinarily not exceed one-third of the pension originally sanctioned and the pension left should be adequate for maintenance.

Rule 9.14 governs provisional pension and provides that gratuity is not payable until departmental or judicial proceedings conclude and final orders are passed.

Rule 8.21(aa) of Volume I, Part I permits withholding of leave encashment only where the competent authority forms an opinion that some amount is likely to become recoverable from the employee after conclusion of the proceedings.

The Tribunal relied on Darshan Singh v. State of Punjab, 2019 (1) SCT 703, and Kaushalaya Devi v. State of Punjab, CWP No. 6187 of 2016, holding that the one-third ceiling under Rule 2.2(a) applies even where the pensioner has been convicted by a criminal court.

It also followed Mahal Chand v. Union of India, O.A. No. 649/2021, which applied those principles.

The applicant’s claim concerning the suspension period was considered under the applicable rules, including Rule 7.3-B(1), but no right to full pay and allowances was found on the facts.

The Tribunal held that conviction for a serious crime empowered the respondents to regulate or withhold pension, but did not confer an unrestricted power to withhold the entire pension.

Reading Rule 2.2(a) as a whole, and following the binding interpretation in Darshan Singh and Kaushalaya Devi, the Tribunal concluded that the statutory ceiling of ordinarily one-third applied equally to conviction cases and grave-misconduct cases.

Accordingly, the direction for complete retrospective withholding of pension was unsustainable and required fresh determination under Rule 2.2(a).

As to leave encashment, the Tribunal found that mere pendency of criminal proceedings did not justify withholding.

Since the record did not show that the competent authority had formed and recorded an opinion regarding likely recoverability of Government dues, the matter was remitted for reconsideration under Rule 8.21(aa), with release required if no legally sustainable satisfaction could be recorded.

Gratuity stood on a different footing because Rule 9.14(c) expressly deferred payment until conclusion of the judicial proceedings and final orders; therefore, its withholding was upheld while the criminal appeal remained pending.

The claims for full pay, revised subsistence allowance and consequential suspension-period benefits were rejected because the applicant had been paid subsistence allowance under the applicable rules and had not established a statutory entitlement to full salary or further revision in the circumstances.

The order dated 13.07.2016 was quashed to the limited extent that it withheld the applicant’s entire pension from 19.08.2013.

The respondents were directed to re-fix and regulate the pension strictly under Rule 2.2(a), in light of Darshan Singh, Kaushalaya Devi and Mahal Chand, and to release any consequential pensionary benefits within three months of receiving the Tribunal’s order.

The respondents were also directed to reconsider the applicant’s claim for leave encashment under Rule 8.21(aa), recording reasons if withholding was considered justified, and otherwise release the amount after adjustment of legally recoverable dues within the same period.

The withholding of gratuity and the remaining claims concerning the suspension period were upheld, and the orders dated 18.09.2023 and 20.11.2023 were modified only to that extent.

No order as to costs was made.