DR. HIRA LALversusSTATE OF BIHAR & ORS.

                        [2020] 2 S.C.R. 907                              907


                          DR. HIRA LAL                                   A
                                  v.
                     STATE OF BIHAR & ORS.
               (Civil Appeal Nos. 1677-1678 of 2020)
                       FEBRUARY 18, 2020                                 B
    [UDAY UMESH LALIT AND INDU MALHOTRA,JJ.]
      Service Law:
       Retiral benefits – 10% of pension and full amount of gratuity
– Withholding of – On account of pending criminal proceedings –          C
On the basis of Circulars dated 22.8.1974 and 31.10.1974 r/w.
Government Resolution dated 31.7.1980 – Challenged in writ
petition – Single Judge of High Court dismissed the petition – Order
affirmed in LPA – Appeal to Supreme Court – Held: Rule 43(b) of
Bihar Pension Rules, 1950 which provides for withholding of
                                                                         D
pension does not cover a situation where judicial or departmental
proceedings are pending – The Circulars and the Government
Resolution being administrative/executive orders (not issued in
exercise of the power u/Art. 309 of Constitution) have no force of
law – Right to receive pension and gratuity are right to property
protected under Art. 300A of the Constitution – It cannot be taken       E
away by an executive fiat or administrative instruction – In absence
of statutory Rules, State could not have withheld the pension and
gratuity on the basis of executive instructions – Therefore, the State
was unjustified in withholding 10% pension – However, after
amendment of r. 43 on 19.7.2012 by insertion of clause(c), State is
                                                                         F
empowered to withhold 10% of pension amount – State is directed
to release the 10% of pension amount from 31.3.2008 (date of
superannuation) till 19.7.2012 – As per r. 27 of Pension Rules,
‘pension’ includes ‘gratuity’ – Therefore, entire gratuity amount also
could not have been withheld – State is directed to release 90% of
the gratuity amount – Bihar Pension Rules, 1950 – rr. 43 and 27.         G
      Allowing the appeals, the Court
      HELD: 1. A reading of Rule 43(b) of Bihar Pension Rules,
1950 would indicate that the State Government was empowered
to withhold or withdraw the whole or part of the amount of pension,
                                                                         H
                                 907
908            SUPREME COURT REPORTS                      [2020] 2 S.C.R.


A     permanently or for a specified period, if the pensioner was “found
      to be guilty of grave misconduct” in any departmental or judicial
      proceeding, or to have “caused pecuniary loss to Government
      by misconduct or negligence”, during the tenure of his service.
      Rule 43(b) did not cover a situation where judicial or departmental
      proceedings were pending. [Paras 11.2 and 12.1][913 G-H; 914-
B
      A]
            2. The Circulars dated 22.08.1974 and 31.10.1974, and
      Government Resolution No. 3104 dated 31.07.1980, were merely
      administrative instructions/executive orders. They were not
      issued in exercise of the power under Article 309 of the
C     Constitution and cannot be said to have the force of law. The
      absence of statutory rules permitting withholding of pension or
      gratuity, the State could not do so by way of executive instructions.
      [Para 13.1][917 A-B; 918-H; 919-A]
            State of Jharkhand and Ors. v. Jitendra Kumar
D           Srivastava and Ors. (2013) 12 SCC 210 : [2013] 8 SCR
            177 – relied on.
            3. The position has however changed with the amendment
      to the Bihar Pension Rules on 19.07.2012 by the Governor of
      Bihar in exercise of the powers under Article 309 of the
E     Constitution, whereby Clause (c) has been inserted in Rule 43.
      Rule 43 (c) provides that where a departmental proceeding or
      judicial proceeding is initiated during the service period of a
      Government servant, and prosecution had been sanctioned but
      not concluded till superannuation, the provisional pension payable
F     shall be less than the maximum admissible amount, but shall in
      no case be less than 90%. [Paras 13.2 and 13.3][919-B; 919D-E]
            4. It is well settled that the right to pension cannot be taken
      away by a mere executive fiat or administrative instruction.
      Pension and gratuity are not mere bounties, or given out of
G     generosity by the employer. An employee earns these benefits
      by virtue of his long, continuous, faithful and un-blemished
      service. The right to receive pension of a public servant has been
      held to be covered under the “right to property” under Article
      31(1) of the Constitution. The right to receive pension has been

H
          DR. HIRA LAL v. STATE OF BIHAR & ORS.                         909


held to be a right to property protected under Article 300A of the      A
Constitution even after the repeal of Article 31(1) by the
Constitution (Forty-Fourth Amendment) Act, 1978 w.e.f.
20.06.1979. [Paras 13.4 and 13.6][919 E-F; 923 C-D]
      Deokinandan Prasad v. State of Bihar (1971) 2 SCC
      330 : [1971] 0 Suppl. SCR 634; D.S. Nakara and Ors.               B
      v. Union of India (1983) 1 SCC 305 : [1983] 2 SCR
      165 – followed.
      State of West Bengal v. Haresh C. Banerjee and Ors.
      (2006) 7 SCC 651 : [2006] 5 Suppl. SCR 620 – relied
      on.                                                               C
      5. The Respondent-State was unjustified in withholding
10% pension of the Appellant under administrative Circulars dated
22.08.1974 and 31.10.1974, and Government Resolution No. 3104
dated 31.07.1980 after the Appellant had superannuated on
31.03.2008. It is directed that 10% of the pension amount which         D
had been withheld after superannuation on 31.03.2008 till
19.07.2012 is liable to be paid to the Appellant. [Para 14][923 E-
G]
       6. After Rule 43(c) was inserted in the Bihar Pension Rules
and brought into force on 19.07.2012, the State is empowered to         E
legally withhold 10% of the pension amount of the Appellant, till
the criminal proceedings in R.C. Case No. 48A/1996 are
concluded. Consequently, the State will deduct 10% from the
pension amount w.e.f. 19.07.2012 subject to the outcome of the
criminal proceedings. [Para 14][923 G-H]
                                                                        F
       7. With respect to withholding of the full amount of gratuity,
as per Rule 27 of the Bihar Pension Rules, “pension” includes
“gratuity”. With the insertion of Rule 43 (c) in the statute book
w.e.f. 19.07.2012, it is clear that gratuity also could not have been
withheld under administrative circulars dated 22.08.1974 and
31.10.1974, and Government Resolution No. 3104 dated                    G
31.07.1980. The State is directed to release 90% of the gratuity
payable to the Appellant. The balance 10% will be released
subject to the outcome of the criminal proceedings pending
against him. [Para 15][924 A-C]
                                                                        H
910            SUPREME COURT REPORTS                          [2020] 2 S.C.R.


A           Vijay Kumar Mishra v. State of Bihar 2017 (1) PLJR
            575; Arvind Kumar Singh v. State of Bihar & Ors. etc.
            etc. (2018) 159 FLR 143 – referred to.
                              Case Law Reference
      [2013] 8 SCR 177                 relied on              Para 5
B
      2017 (1) PLJR 575                referred to            Para 9
      [1971] 0 Suppl. SCR 634          followed               Para 13.4
      [1983] 2 SCR 165                 followed               Para 13.5
      [2006] 5 Suppl. SCR 620          relied on              Para 13.6
C
      (2018) 159 FLR 143               referred to            Para 13.7
            CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1677-
      1678 of 2020.
            From the Judgment and Order dated 21.03.2017 of the High Court
D     of Judicature at Patna in LPA No. 1529 of 2013 and order dated
      23.08.2017 in Civil Review No. 207 of 2017.
            Sunil Kr., Sr. Adv., Himanshu Shekhar, Advs. for the Appellant.
           Ms. Pratistha Vij, Abhinav Mukerji, Parthiv K. Goswami,
E     Ms. Diksha Rai, Sibo Shankar Mishra, Mrs. Anil Katiyar, Advs. for the
      Respondents.
             The Judgment of the Court was delivered by
            INDU MALHOTRA, J.
            Delay condoned. Leave granted.
F
             1. The short issue which arises for consideration is whether the
      State of Bihar was justified in withholding 10% pension and full gratuity
      of the Appellant under Circulars dated 22.08.1974 and 31.10.194, and
      Government Resolution dated 31.07.1980, on the ground of pending
      criminal proceedings?
G
            2. The Appellant was appointed to the post of Touring Veterinary
      Officer (TVO) at Pawana, Bihar by the Respondent-State. While the
      Appellant was in active service, he was made an accused in the Fodder
      Scam lodged by the CBI in RC Case No.48A/1996 wherein a Charge-
      Sheet was filed against him on 21.11.2003. The Special Judge, CBI,
H
              DR. HIRA LAL v. STATE OF BIHAR & ORS.                             911
                      [INDU MALHOTRA, J.]

Animal Husbandry took cognizance in the criminal case. The Appellant            A
was placed under suspension on 31.05.2002 under Rule 49(a) of the
Civil Services (Classification, Control & Appeal) Rules, 1930, which
were in force prior to the enforcement of the Bihar Government Servant
(Classification, Control & Appeal) Rules, 2005. The Appellant continued
to remain under suspension till he attained the age of superannuation on
                                                                                B
31.03.2008.
       3. On attaining the age of superannuation, the State Government
vide Order dated 17.09.2008 sanctioned payment of 90% of the
provisional pension of the Appellant, and withheld 10% of the pension,
entire gratuity, leave encashment and GPF on account of pending criminal
proceedings.                                                                    C

        4. Aggrieved by the action of withholding 10% pension and other
retiral benefits, the Appellant filed a Writ Petition before the Patna High
Court praying for a writ of mandamus directing the Respondents to pay
full pension, gratuity, leave encashment, and General Provident Fund
along with interest.                                                            D

       5. The Appellant inter alia contended that the Bihar Pension
Rules,1950 do not prohibit payment of full pension and gratuity to a retired
Government servant against whom criminal proceedings were pending.
Rule 43(b) of the Bihar Pension Rules is not applicable, until the delinquent
employee is found to be guilty of grave misconduct in a departmental or         E
judicial proceedings or to have caused pecuniary loss to the Government
by misconduct or negligence. Consequently, Rule 43(b) would not be
applicable during the pendency of criminal proceedings. Reliance was
placed on the judgment of this Court in State of Jharkhand and Ors.
vs. Jitendra Kumar Srivastava and Ors.1, wherein it has been that               F
Rule 43(b) does not permit withholding of pension and gratuity when
departmental or judicial proceedings are still pending. It was further
contended the Government Resolution dated 31.07.1980, being an
executive instruction had no force of law, and could not take away the
right to receive pension, which is recognised as a constitutional right
under Article 300A of the Constitution.                                         G
      6. The State of Bihar filed its Counter-Affidavit stating that a sum
of Rs.12,78,711/- towards G.P.F and Rs.1,35,256/- towards leave
encashment had since been paid to the Appellant on 15.01.2009 and
1
    (2013) 12 SCC 210                                                           H
912                SUPREME COURT REPORTS                         [2020] 2 S.C.R.


A     03.02.2009 respectively. The State justified its stand on the basis of
      Circulars dated 22.08.1974 and 31.10.1974 issued by the Finance
      Department read with Government Resolution dated 31.07.1980, which
      lays down that if a government servant retires while under suspension,
      he will not be entitled to payment of full pension and gratuity, and at best,
      would be entitled to payment of 90% of the provisional pension till the
B
      conclusion of the departmental or judicial proceedings. It further provided
      that no gratuity or death-cum-retirement gratuity would be payable until
      the conclusion of the said proceedings, and the issuance of final orders
      thereon.
             7. The issue which remained for consideration was with respect
C     to withholding payment of 10% of the pension and full amount of gratuity.
              8. The learned Single Judge of the High Court dismissed the Writ
      Petition vide Judgment & Order dated 23.01.2013 holding that the claim
      of full pension and gratuity until conclusion of the criminal proceedings
      was untenable both on facts, and in law. Since the order of Suspension
D     dated 31.05.2002 was not revoked at any point of time till the Appellant
      attained the age of superannuation, the criminal proceedings would be
      deemed to be continuing during this entire period as per Rule 43(b) of
      the Bihar Pension Rules. As per the Government Circulars dated
      22.8.1974 and 31.10.1974, and Government Resolution dated 31.7.1980,
E     a conscious decision was taken by the State Government for temporarily
      withholding 10% of pension and full amount of gratuity till conclusion of
      the departmental or judicial proceedings.
             9. Aggrieved by the Order of the Single Judge, the Appellant
      preferred an LPA, which was dismissed by a division bench of the High
F     Court vide impugned Judgment & Order dated 21.03.2017. The division
      bench followed the judgment in Vijay Kumar Mishra v. Stateof Bihar2
      on the interpretation of Rules 43(b) and (c) of the Bihar Pension Rules,
      and dismissed the LPA. The division bench held that the Appellant would
      be required to await the outcome of the pending criminal case, before he
      becomes entitled to payment of 10% pension and full amount of gratuity,
G     which had been withheld.
            The Review Petition preferred by the Appellant was dismissed as
      not pressed videOrder dated 23.08.2017.

      2
H         2017 (1) PLJR 575
          DR. HIRA LAL v. STATE OF BIHAR & ORS.                           913
                  [INDU MALHOTRA, J.]

       10. Aggrieved by the judgment of the High Court, the Appellant     A
has filed the present SLP before this Court.
      We have heard learned counsel for the parties, and have
considered the submissions made on their behalf.
      11. Relevant Statutory Provisions
                                                                          B
      11.1 The Bihar Pension Rules, 1950 were enacted under Section
241(2)(b) of the Government of India Act, 1935, and came into force on
20th January, 1950.
      Rules 27 and 43 (a) and (b) are set out hereunder:-
         “27.Pension includes a gratuity.”                                C
         “43 (a) Future good conduct is an implied condition of
      every grant of pension. The Provincial Government reserve
      to themselves the right of withholding or withdrawing a
      pension or any part of it, if the pensioner is convicted of
      serious crime or be guilty of grave misconduct. The decision        D
      of the Provincial Government on any question of withholding
      or withdrawing the whole or any part of a pension under this
      rule, shall be final and conclusive.
          (b) The State Government further reserve to themselves the
      right of withholding or withdrawing a pension or any part of        E
      it, whether permanently or for a specified period, and the
      right of ordering the recovery from a pension of the whole or
      part of any pecuniary loss caused to Government if the
      pensioner is found in departmental or judicial proceeding to
      have been guilty of grave misconduct; or to have caused
                                                                          F
      pecuniary loss to Government by misconduct or negligence,
      during his service including service rendered on re-employment
      after retirement:
                                                  [emphasis supplied]
       11.2 A reading of Rule 43(b) would indicate that the State         G
Government was empowered to withhold or withdraw the whole or part
of the amount of pension, permanently or for a specified period, if the
pensioner was “found to be guilty of grave misconduct” in any
departmental or judicial proceeding, or to have “caused pecuniary loss
to Government by misconduct or negligence”, during the tenure of his
service.                                                                  H
914            SUPREME COURT REPORTS                           [2020] 2 S.C.R.


A           12. Circulars and Resolutions
            12.1 Rule 43(b) did not cover a situation where judicial or
      departmental proceedings were pending.
             The Respondent-State had issued two Circulars on 22.08.1974
      and 31.10.1974, under which a provision was made to pay 75% pension
B     to an employee, who was facing a departmental or judicial proceeding at
      the time of retirement. The Circulars provided that no gratuity or death-
      cum retiral gratuity would be paid during the pendency of the proceedings.
           12.2 The Circular dated 22.08.1974 issued by the Finance
      Department of the Government of Bihar reads as follows:
C
                  “Subject-Payment of pension to Government servants who
            are under suspension or against whom departmental or judicial
            proceedings or enquiries have not been concluded on the date of
            compulsory retirement.

D                 The question of sanctioning pension to Government servants
            who are under suspension or against whom departmental or judicial
            proceedings or enquiries have not been concluded on the date of
            compulsory retirement has been under active consideration of
            Government.
                   2. The State Government have been pleased to decide that
E
            (i) where any departmental or judicial proceeding is instituted under
            rule 43(b) of Bihar Pension Rules a Government servant or where
            a departmental proceeding is continued against an officer who
            have retired on attaining the age of compulsory retirement, or
            otherwise, he shall be paid during the period commencing from
F           the date of his retirement to the date on which, upon conclusion of
            such proceedings, final orders are passed 75% provisional pension
            of the pension which would have been admissible on the basis of
            his qualifying service upto the date of retirement, or if he was
            under suspension on the date of retirement, upto the date
            immediately preceding the date on which he was placed under
G
            suspension, but no gratuity or death-cum-retirement gratuity shall
            be paid to him until the conclusion of such proceeding and the
            issue of final orders thereon.
                  (ii) Payment of provisional pension may under the above
            provision shall be adjusted against the final retirement benefits
H
           DR. HIRA LAL v. STATE OF BIHAR & ORS.                                915
                   [INDU MALHOTRA, J.]

      sanctioned to such officer upon conclusion of the aforesaid               A
      proceedings but no recovery shall be made where the pension
      finally sanctioned is less than the provisional or the pension is
      reduced or withheld either permanently or for a specified period.
            3. The grant of pension under the aforesaid provision shall
      not prejudice the operation of rule 139 of Bihar Pension Rules            B
      where final pension is sanctioned upon the conclusion of the
      proceedings.
            4. These orders will be effective from the 1st November,
      1970. All pending cases will be decided accordingly. (Vide F.D.
      Memo No. PC-11-40-28/74/9144F, dated 22.8.1974.).”                        C
                                                      [emphasis supplied]
       12.3 Subsequently, a clarificatory Circular was issued on
31.10.1974 which reiterated that provisional pension up to only 75%
shall be paid till the conclusion of judicial or departmental proceedings.
                                                                                D
      The Circular dated 31.10.1974 reads as follows:
            “Subject-Payment of pension to Government servants who
      are under suspension or against whom departmental or judicial
      proceedings or enquiries have not been concluded on the date of
      compulsory retirement.
                                                                                E
             In Finance Department’s letter No. PC-11-40.28/74/9144F,
      dated 22.8.1974; which provided that a Government servant who
      has retired and against whom, any departmental or judicial
      proceedings are instituted or are continued shall be paid provisional
      pension to the extent of 75% of the admissible pension. The
                                                                                F
      payment of provisional pension under the aforesaid orders is
      mandatory. But some administrative authorities appear to be under
      the impression that in cases where the departmental proceedings
      instituted against a Government servant were for major penalty
      and in which ultimately no pension might become payable on the
      conclusion of the proceedings after his retirement under rule 43          G
      of Bihar Pension Rules, even the provision need not be sanctioned.
      This view is against the letter and spirit of the said rules. All Heads
      of departments etc. are therefore requested to bring to the notice
      of pension sanctioning authorities under them the correct position
      of the rules as well as the intention of the State Government so
                                                                                H
916            SUPREME COURT REPORTS                             [2020] 2 S.C.R.


A           that the payment of 75% provisional pension is not denied to the
            retired Government servants. (Vide F.D. Memo No. PC-11-40-
            98/74-11260 F, dated 31.10.1974).”
                                                             [emphasis supplied]
            12.4 The State Government issued Government Resolution No.
B     3014 on 31.07.1980, which reads as follows:
                   “7. To withhold or withdraw pension-
                   (a) The decision contained in Clause-6 shall not affect Rule-
            43 of Bihar Pension Rules under which power is vested to withhold
C           or withdraw pension.
                    (b) If any kind of departmental proceedings, criminal case,
            judicial enquiry etc. has not been initiated against any government
            servant till the date of his retirement then in that situation, the
            Pension Sanctioning Authority shall not be empowered to withhold
D           pension under any circumstances. Rule-43 of Bihar Pension Rules
            is a Statutory Rule. Hence, the provisions contrary to it by different
            departments and circulars in respect of obtaining clearance
            certificate from Vigilance Department shall be deemed to be
            cancelled automatically.
                   (c) Where the final disposal of departmental or judicial
E
            proceeding initiated during the service period of any government
            servant is not possible till the date of his/her retirement, then action
            to sanction provisional pension under provisions of Circular No.
            9144/f, dated 22-8-1974 and 11260F, dated 31-10-1974 of the
            Finance Department be initiated so that that the government
F           servant going to retire may not face any difficulty. Provisions
            contained in Clause 8(c) below shall not apply in matters of this
            category. In the cases of this category, the amount of provisional
            pension, as per rule, shall be less than the maximum amount of
            pension admissible, but it shall not be less than 90 per cent in any
            circumstance.”
G
                                                             [emphasis supplied]
             The Government Resolution No. 3104 dated 31.07.1980, provided
      that where departmental or judicial proceedings were initiated during
      the service period of a Government servant, and were not concluded or
H
               DR. HIRA LAL v. STATE OF BIHAR & ORS.                        917
                       [INDU MALHOTRA, J.]

finally disposed of till the date of retirement, then provisional pension   A
under Circulars dated 22.08.1974 and 31.10.1974 would be paid. The
amount of provisional pension was however increased from 75% to 90%
of the maximum amount of pension admissible.
       13.1 In our considered view, the Circulars dated 22.08.1974 and
31.10.1974, and Government Resolution No. 3104 dated 31.07.1980, were       B
merely administrative instructions/executive orders. They were not issued
in exercise of the power under Article 309 of the Constitution and cannot
be said to have the force of law.
       The Government Resolution dated 31.07.1980 came up for
consideration before this Court in State of Jharkhand and Ors. vs.          C
Jitendra Kumar Srivastava and Ors.3. After considering Rule 43(b)
of the Bihar Pension Rules and Government Resolution No. 3104 dated
31.07.1980, this Court held that the State had no authority or power to
withhold the full amount of pension or gratuity of a Government servant
during the pendency of judicial or departmental proceedings. This Court
held that:                                                                  D

         “9. Having explained the legal position, let us first discuss
         the rules relating to release of Pension. The present case is
         admittedly governed by the Bihar Pension Rules, as
         applicable to the State of Jharkhand. Rule 43(b) of the said
         Pension Rules confers power on the State Government to             E
         withhold or withdraw a pension or part thereof under certain
         circumstances. This Rule 43(b) reads as under:
         …..
         From the reading of the aforesaid Rule 43(b), following            F
         position emerges:
         (i) The State Government has the power to withhold or
         withdraw pension or any part of it when the pensioner is found
         to be guilty of grave misconduct either in a departmental
         proceeding or judicial proceeding.
                                                                            G
         (ii) This provision does not empower the State to invoke the
         said power while the department proceeding or judicial
         proceeding are pending.

3
    (2013) 12 SCC 210                                                       H
918            SUPREME COURT REPORTS                           [2020] 2 S.C.R.


A           (iii) The power of withholding leave encashment is not
            provided under this rule to the State irrespective of the result
            of the above proceedings.
            (iv) This power can be invoked only when the proceedings
            are concluded finding guilty and not before.
B           …                               .                            .
            11. Reading of Rule 43(b) makes it abundantly clear that even
            after the conclusion of the departmental inquiry, it is
            permissible for the Government to withhold pension etc. ONLY
            when a finding is recorded either in departmental inquiry or
C           judicial proceedings that the employee had committed grave
            misconduct in the discharge of his duty while in his office.
            There is no provision in the rules for withholding of the
            pension/gratuity when such departmental proceedings or
            judicial proceedings are still pending.
D           14. …..A person cannot be deprived of this pension without
            the authority of law, which is the Constitutional mandate
            enshrined in Article 300A of the Constitution. It follows that
            attempt of the Appellant to take away a part of pension or
            gratuity or even leave encashment without any statutory
            provision and under the umbrage of administrative instruction
E           cannot be countenanced.
            15. It hardly needs to be emphasized that the executive
            instructions are not having statutory character and, therefore,
            cannot be termed as “law” within the meaning of aforesaid
            Article 300A. On the basis of such a circular, which is not
F           having force of law, the Appellant cannot withhold-even a
            part of pension or gratuity. As we noticed above, so far as
            statutory rules are concerned, there is no provision for
            withholding pension or gratuity in the given situation. Had
            there been any such provision in these rules, the position would
G           have been different.”
                                                            [emphasis supplied]
             It was held that pension is ‘property’ within the meaning of Article
      300A of the Constitution, and executive instructions which do not have
      any statutory sanction cannot be termed as “law” within the meaning of
H     Article 300A. It was further held that in the absence of statutory rules
              DR. HIRA LAL v. STATE OF BIHAR & ORS.                           919
                      [INDU MALHOTRA, J.]

permitting withholding of pension or gratuity, the State could not do so      A
by way of executive instructions. It was observed that “So far as
statutory rules are concerned, there is no provision for withholding
pension or gratuity in the given situation. Had there been any such
provision in these rules, the position would have been different”.
      13.2 The position has however changed with the amendment to             B
the Bihar Pension Rules on 19.07.2012 by the Governor of Bihar in
exercise of the powers under Article 309 of the Constitution, whereby
Clause (c) has been inserted in Rule 43, which reads as follows:
         “(c) Where the departmental proceeding or judicial
         proceeding, in which the prosecution has been sanctioned             C
         against such servant, initiated during the service period of
         the government servant, is not concluded till the retirement of
         the government servant, the amount of provisional pension
         shall be less than the maximum admissible amount of pension
         but shall in no case be less than 90% (ninety percent).”
                                                                              D
       13.3 Rule 43 (c) provides that where a departmental proceeding
or judicial proceeding is initiated during the service period of a
Government servant, and prosecution had been sanctioned but not
concluded till superannuation, the provisional pension payable shall be
less than the maximum admissible amount, but shall in no case be less
than 90%.                                                                     E

       13.4 It is well settled that the right to pension cannot be taken
away by a mere executive fiat or administrative instruction. Pension and
gratuity are not mere bounties, or given out of generosity by the employer.
An employee earns these benefits by virtue of his long, continuous,
faithful and un-blemished service.4 The right to receive pension of a         F
public servant has been held to be covered under the “right to property”
under Article 31(1) of the Constitution by a Constitution bench of this
Court in Deokinandan Prasad v. State of Bihar5, which ruled that:
         “ 30. The question whether the pension granted to a public
         servant is property attracting Article 31(1) came up for             G
         consideration before the Punjab High Court in Bhagwant
         Singh v. Union of India [AIR 1962 Punj 503]. It was held
         that such a right constitutes “property” and any interference
4
    (2013) 12 SCC 210
5
    (1971) 2 SCC 330                                                          H
920      SUPREME COURT REPORTS                        [2020] 2 S.C.R.


A     will be a breach of Article 31(1) of the Constitution. It was
      further held that the State cannot by an executive order curtail
      or abolish altogether the right of the public servant to receive
      pension. This decision was given by a learned Single Judge.
      This decision was taken up in letters patent appeal by the
      Union of India. Letters Patent Bench in its decision in Union
B
      of India v. Bhagwant Singh [ILR 1965 Punj 1] approved the
      decision of the learned Single Judge. The Letters Patent Bench
      held that the pension granted to a public servant on his
      retirement is “property” within the meaning of Article 31(1)
      of the Constitution and he could be deprived of the same only
C     by an authority of law and that pension does not cease to be
      property on the mere denial or cancellation of it. It was further
      held that the character of pension as “property” cannot
      possibly undergo such mutation at the whim of a particular
      person or authority.
D     31. The matter again came up before a Full Bench of the
      Punjab and Haryana High Court in K.R. Erry v. State of
      Punjab [ILR 1967 Punj & Har 278]. The High Court had to
      consider the nature of the right of an officer to get pension.
      The majority quoted with approval the principles laid down
      in the two earlier decisions of the same High Court, referred
E     to above, and held that the pension is not to be treated as a
      bounty payable on the sweet will and pleasure of the
      Government and that the right to superannuation pension
      including its amount is a valuable right vesting in a government
      servant. It was further held by the majority that even though
F     an opportunity had already been afforded to the officer on
      an earlier occasion for showing cause against the imposition
      of penalty for lapse or misconduct on his part and he has
      been found guilty, nevertheless, when a cut is sought to be
      imposed in the quantum of pension payable to an officer on
      the basis of misconduct already proved against him, a further
G     opportunity to show-cause in that regard must be given to the
      officer. This view regarding the giving of further opportunity
      was expressed by the learned Judges on the basis of the
      relevant Punjab Civil Service Rules. But the learned Chief
      Justice in his dissenting judgment was not prepared to agree
H     with the majority that under such circumstances a further
              DR. HIRA LAL v. STATE OF BIHAR & ORS.                           921
                      [INDU MALHOTRA, J.]

          opportunity should be given to an officer when a reduction          A
          in the amount of pension payable is made by the State. It is
          not necessary for us in the case on hand to consider the
          question whether before taking action by way of reducing or
          denying the pension on the basis of disciplinary action already
          taken, a further notice to show-cause should be given to an
                                                                              B
          officer. That question does not arise for consideration before
          us. Nor are we concerned with the further question regarding
          the procedure, if any, to be adopted by the authorities before
          reducing or withholding the pension for the first time after
          the retirement of an officer. Hence we express no opinion
          regarding the views expressed by the majority and the minority      C
          Judges in the above Punjab High Court decision on this
          aspect. But we agree with the view of the majority when it has
          approved its earlier decision that pension is not a bounty
          payable on the sweet will and pleasure of the Government
          and that, on the other hand, the right to pension is a valuable
                                                                              D
          right vesting in a government servant.
          33. Having due regard to the above decisions, we are of the
          opinion that the right of the petitioner to receive pension is
          property under Article 31(1) and by a mere executive order
          the State had no power to withhold the same. Similarly, the
          said claim is also property under Article 19(1)(f) and it is not    E
          saved by sub-article (5) of Article 19. Therefore, it follows
          that the order, dated June 12, 1968, denying the petitioner
          right to receive pension affects the fundamental right of the
          petitioner under Articles 19(1)(f) and 31(1) of the Constitution,
          and as such the writ petition under Article 32 is                   F
          maintainable...”
                                                       [emphasis supplied]
      13.5 The aforesaid judgment was followed in D.S. Nakara and
Ors. v. Union of India6 by another Constitution bench of this Court,
which held that:                                                              G
          “20. 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
6
    (1983) 1 SCC 305                                                          H
922                 SUPREME COURT REPORTS                      [2020] 2 S.C.R.


A               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 v. State of Bihar and Ors7.: 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
B
                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 maters that it may be necessary for the authority to
C               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 State of Punjab
                and Anr. v. Iqbal Singh.8
                29. Summing up it can be said with confidence that pension
D               is not only compensation for loyal service rendered in the
                past, but pension also has a broader significance, in that it is
                a measure of socio-economic justice which inheres economic
                security in the fall of life when physical and mental prowess
                is ebbing corresponding to aging process and, therefore, one
                is required to fall back on savings. One such saving in kind
E               is when you give your best in the hey-day of life to your
                employer, in days of invalidity, economic security by way of
                periodical payment is assured. The term has been judicially
                defined as a stated allowance or stipend made in
                consideration of past service or a surrender of rights or
F               emoluments to one retired from service. Thus the pension
                payable to a government employee is earned by rendering
                long and efficient service and therefore can be said to be a
                deferred portion of the compensation or for service rendered.
                In one sentence one can say that the most practical raison
                d’etre for pension is the inability to provide for oneself due
G               to old age. One may live and avoid unemployment but not
                senility and penury if there is nothing to fall back upon.


      7
          (1971) Supp. S.C.R. 634
      8
H         (1976) II LLJ 377 SC
            DR. HIRA LAL v. STATE OF BIHAR & ORS.                             923
                    [INDU MALHOTRA, J.]

       31. From the discussion three things emerge: (i) that pension          A
       is neither a bounty nor a matter of grace depending upon the
       sweet will of the employer and that it creates a vested right
       subject to 1972 Rules which are statutory in character
       because they are enacted in exercise of powers conferred by
       the proviso to Article 309 and clause (5) of Article 148 of the
                                                                              B
       Constitution; (ii) that the pension is not an ex gratia payment
       but it is a payment for the past service rendered; and (iii) it is
       a social welfare measure rendering socio-economic justice to
       those who in the hey-day of their life ceaselessly toiled for
       the employer on an assurance that in their old age they would
       not be left in lurch..”                                                C
                                                      [emphasis supplied]
      13.6 The right to receive pension has been held to be a right to
property protected under Article 300A of the Constitution even after the
repeal of Article 31(1) by the Constitution (Forty-Fourth Amendment)
Act, 1978 w.e.f. 20.06.1979, as held in State of West Bengal v. Haresh        D
C. Banerjee and Ors.9.
       13.7 The Division Bench of the Patna High Court in the impugned
judgment has relied solely on the earlier decision of a co-ordinate bench
of the Patna High Court in Vijay Kumar Mishra v. Stateof Bihar10 to
deny the reliefs sought by the Appellant.Pertinently, the judgment in Vijay   E
Kumar Mishra was overruled by a Full Bench of the Patna High Court
in Arvind Kumar Singh v. State of Bihar & Ors. etc. etc.11.
      14. In view of the above, we hold that the Respondent-State was
unjustified in withholding 10% pension of the Appellant under
administrative Circulars dated 22.08.1974 and 31.10.1974, and                 F
Government Resolution No. 3104 dated 31.07.1980 after the Appellant
had superannuated on 31.03.2008.
       We direct that 10% of the pension amount which had been withheld
after superannuation on 31.03.2008 till 19.07.2012 is liable to be paid to
the Appellant within a period of 12 weeks from the date of this Judgment.     G
     After Rule 43(c) was inserted in the Bihar Pension Rules and
brought into force on 19.07.2012, the State is empowered to legally
9
  (2006) 7 SCC 651
10
   2017 (1) PLJR 575
11
   2019 Lab IC 2937 (FB): (2018) 159 FLR 143                                  H
924             SUPREME COURT REPORTS                         [2020] 2 S.C.R.


A     withhold 10% of the pension amount of the Appellant, till the criminal
      proceedings in R.C. Case No. 48A/1996 are concluded. Consequently,
      the State will deduct 10% from the pension amount w.e.f. 19.07.2012
      subject to the outcome of the criminal proceedings.
             15. With respect to withholding of the full amount of gratuity, we
B     find that as per Rule 27 of the Bihar Pension Rules, “pension” includes
      “gratuity”. With the insertion of Rule 43 (c) in the statute book w.e.f.
      19.07.2012, it is clear that gratuity also could not have been withheld
      under administrative circulars dated 22.08.1974 and 31.10.1974, and
      Government Resolution No. 3104 dated 31.07.1980.
C           The State is directed to release 90% of the gratuity payable to the
      Appellant within a period of 12 weeks from the date of this judgment.
      The balance 10% will be released subject to the outcome of the criminal
      proceedings pending against him in R.C. Case No. 48A/1996.
             The Civil Appeals are allowed in the aforesaid terms.
D            All pending Applications, if any, are accordingly disposed of.
             Ordered accordingly.


      Kalpana K. Tripathy                                        Appeals allowed.
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