Government Servant Not Entitled To Full Pension/Gratuity During Pending Disciplinary/Judicial Proceedings: Allahabad HC: Right or Wrong?

Government Servant Not Entitled To Full Pension/Gratuity During Pending Disciplinary/Judicial Proceedings: Allahabad HC

Author: Mr. Anshul Goyal from Asian Law College.


Generally, the  Pension is fund into which a sum of money is added during an employee’s employment years, and from which payments are drawn to support the person’s retirement from work in the form of periodic payments. A pension may be a “defined benefit plan” where a fixed sum is paid regularly to a person, or a “defined contribution plan” under which a fixed sum is invested and then becomes available at retirement age. Pensions should not be confused with severance pay; the former is usually paid in regular installments for life after retirement, while the latter is typically paid as a fixed amount of employees was given

A pension created by an employer for the benefit of an employee is commonly referred to as an occupational or employer pensions such as Labor unions, the government, or other organizations may also fund pensions. Occupational pensions are a form of deferred compensation, usually advantageous to employee and employer for tax reasons. Many pensions also contain an additional insurance aspect, since they often will pay benefits to survivors or disabled beneficiaries.

Gratuity can be defined as an after retirement social security benefits, provided to the employees by the employer on account of the services provided by them to the establishment. Simply put gratuity is a mark of recognition that an employer gives to his/her employee for the contribution to the company when she leaves to retire. In India, gratuity is governed by the Payment of Gratuity Act, 1972, which applies to every establishment employing ten or more employees.

Types of Pensions

They are generally three types of Pensions are 

    1.Employment-based Pensions:- A retirement plan is an arrangement to provide people with an income during retirement when they are no longer earning a steady income from employment. Often retirement plans require both the employer and employee to contribute money to a fund during their employment in order to receive defined benefits upon retirement.

    2. Social and State pension:- A basic state pension is a “contribution-based” benefit and depends on an individual’s contribution history.

  3. Disability Pensions:- Some pension plans will provide for members in the event they suffer a disability. This may take the form of early entry into a retirement plan for a disabled member below the normal retirement age.

Concept Of Pensions 

An employee earns these benefits by dint of his long, continuous, faithful and unblemished service. In the case of a civil servant whose service conditions are governed by statutory rules; pension,   a deferred salary, is a right and the payment of pension/gratuity does not depend upon the discretion of the Government. Government servant coming within the Rules is entitled to claim the pension. The right to receive pension flows not by an order to that effect but the right to receive pension flows by virtue of the Rules governing pension and gratuity.

  The   Supreme Court in D.S. Nakara vs. Union of India placing reliance upon the Constitution Bench decision rendered in Deokinandan Prasad vs. the State of Bihar, and the State of Punjab vs. Iqbal Singh, observed as follows:

“The   antiquated   notion of pension   being a bounty a gratuitous payment depending upon the sweet will or grace of the employer not claimable as a right and, therefore, no right to pension can be enforced through Court has been swept under the carpet by the decision of the Constitution Bench in Deoki Nandan   Prasad (supra) wherein this Court authoritatively ruled that pension is a right and the payment of it does not depend upon the discretion of the Government but is governed by the rules and a Government servant coming within those rules is entitled to claim pension. It was further held that the grant of pension does not depend upon any one’s discretion. It is only for the purpose of quantifying the amount having regard to service and other allied matters that it may be necessary for the authority to pass an order to that effect but the right to receive pension flows to the officer not because of any such order but by virtue of the rules. This view was reaffirmed in Iqbal Singh (supra)”.

Circumstances of Pensions
The circumstances of pensions are acquired to an employee are in the nature of ‘property’. This right of property cannot be taken away without due process of law as per the provisions of Article 300­A of the Constitution of India. It, therefore, follows that executive instructions not having statutory character and, therefore, cannot be deemed as ‘law’ within the meaning of Article 300A. The  State Government cannot withhold even a part of pension or gratuity if there is no provision for withholding pension or gratuity in the given situation. For withholding of pension or gratuity, there must be an express provision in the Rules failing which the State Government is not competent to withhold pension or gratuity on the strength of executive instructions not having the force of law.  

Case Laws and judgement

Satya Narayan Gupta vs State Of U.P. And 2 Others on 4 September, 2018 

  • A careful reading of the above noted provisions indicates that the Regulation 351 of the Civil Service Regulations operates in a situation where a retired Government servant is found guilty of gross misconduct or to have caused pecuniary loss to the Government by his misconduct or negligence i.e. in a case of proved gross misconduct in a departmental or judicial proceeding. Thus, Regulation 351-A of the Civil Service Regulations postulates that there has to be a determination in departmental or judicial proceedings.
  •  Whereas Regulation 351-AA operates in a different situation i.e. in a case of pendency of departmental or judicial proceedings or any inquiry by the Administrative Tribunal, on the date of retirement or instituted after retirement. Regulation 919-A further provides for computation of provisional pension payable under Regulation 351-AA and adjustment thereof on the culmination of departmental/judicial proceedings. Regulation 919-A(3), however, contains an expression of prohibition of payment of death-cum-retirement gratuity to a Government servant until the conclusion of the departmental or judicial proceeding or an inquiry made by the Administrative Tribunal. 
  • Regulation 41 of the Civil Service Regulations provides that except when the term “pension” is used in any contradiction of gratuity, “Pension” would include gratuity. Thus, from a combined reading of the aforesaid provisions, there cannot be a doubt that the power of withholding pension or gratuity until the conclusion of departmental/judicial proceeding flows from the statutory rules and such power can be exercised in the facts and circumstances of a given case.

Allahabad high court verdict on pensions/gratuity comprising of Justice Pankaj Mithal, Justice Suneet Kumar and Justice Rohit Ranjan Agarwal observed that the entitlement to full pension /death-cum-retirement gratuity to the government servant is subject to the outcome of the disciplinary/judicial proceedings and issue of final orders thereon by the competent authority. The bench was considering a reference to it on the issue of entitlement of the government servant to receive death-cum-retirement gratuity on superannuation or otherwise pending judicial proceedings.

The court upheld a division bench judgment view that the term ‘pension’ would include ‘gratuity’ particularly in Article 351, 351-A of the Civil Service Regulations. Referring to these regulations, the bench observed:

“Article 351 and/or 351-A can be invoked by the State Government or the Governor, as the case may be if the pensioner

 (a) be convicted of serious crime

(b) be guilty of grave misconduct 

(c) caused pecuniary loss to the government in service. 

The power can be exercised in either of the eventualities. The action thereunder is punitive.

Pendency of disciplinary/judicial proceedings on the date of retirement, or instituted after retirement, provisional pension equal to maximum pension as mandated under Article 919-A may be sanctioned to the government servant for the period up to the conclusion of the proceedings.

No gratuity is payable to the government servant during the pendency of disciplinary/judicial proceedings/inquiry by the Administrative Tribunal until the conclusion of the proceedings/inquiry and orders being passed thereon by the competent authority.

The Stage at which government servant is entitled to full pensions/gratuity

The question that arises is whether the government servant/pensioner can seek intervention at a stage before the competent authority has had the occasion to pass appropriate order upon conclusion of the disciplinary/judicial proceedings/or inquiry by the Administrative Tribunal. They are various stages are

  1. there either withholding gratuity/pensions under Article 351A through the competent authority
  2. The entitlement to provisional pension and deferment of gratuity during pendency of the proceedings was not made subject to any   further conditions at the stage

      3. The stage deferred until orders thereon were required to be passed by the competent authority recording satisfaction or otherwise upon conclusion of the proceedings/inquiry.