Holding

The term "pension" in Rule 9 includes gratuity unless expressly distinguished, so the President may withhold both pension and gratuity as punishment, and the 1991 amendment was merely clarificatory.

Summary

Jarnail Singh, a retired Under Secretary, was found guilty of serious irregularities and the President ordered permanent withholding of his full pension and death‑cum‑retirement gratuity. Singh challenged the order, arguing that Rule 9 of the Central Civil Services (Pension) Rules, 1972 did not empower the President to withhold gratuity before the 1991 amendment. The Supreme Court examined the definition of "pension" in Rule 3(1)(o), which includes gratuity unless the term is used in contradistinction, and held that Rule 9's reference to "pension" therefore covers gratuity. The Court further held that the 1991 amendment merely clarified this existing inclusion and did not create a new power. Consequently, the appeal was dismissed and the order of withholding both pension and gratuity was upheld.

Issues considered

Whether Rule 9 of the Central Civil Services (Pension) Rules, 1972 allows the President to withhold gratuity as a punitive measure.
Whether the definition of "pension" in Rule 3(1)(o) includes gratuity for the purposes of Rule 9.
Whether the 1991 amendment to Rule 9 was substantive or merely clarificatory.

Legislation cited

Central Civil Services (Pension) Rules, 1972s. Rule 3(1)(o), s. Rule 69(1)(c), s. Rule 71, s. Rule 73, s. Rule 73(3), s. Rule 9(1)
Constitution of Indias. Article 366(17)

Subjects

pensiongratuitywithholdingdisciplinary actionCentral Civil Services (Pension) RulesArticle 366government employeeretirement benefits

Judgment

A JARNAIL SINGH
v.
SECRETARY, MINISTRY OF.HOME AFFAIRS AND ORS.

DECEMBER 3, 1992 '.

B [J.S. VERMA, YOGESHWAR DAYAL AND
N. VENKATACHALA, JJ.]

Cent~al Civil Services (Pension) Rules 1972-Rule 9 r/w Rule 3(J)(o)-
Whether prior to 1991 Amendment payment of gratuity could be withheld as
C punishment for recovery of loss sustained to government-Held, 'pension' or-
dinarily inclztdes gratuity except when used in contradistinction to
gratuity--1991 Amendment including gratitity only clarificatory--Constitution
of bidia, Article 366 (17}-Central Civil Services (Pension). Rules, 1972,
Rr.69(1)(c), 71 and 73.
D The appellant retired as Under Secretary in the Ministry of Home
Affairs on ~1.3.86. An inq~iry was held in consultation with the Union
Public Service Commission and the appellant was found to have com-
mitted serious irregularities. By order dated 26.5.88; the President of India
directed that full .monthly pension and the entire amount of death-cum-
E retirement gratuity otherwise admissible to the appellant be withheld on a
permanent basis.

The Central Administrative Trib.,nal rejected the appellant'-s chal•
lenge to the order.

F In the Supreme Court, notice was confined to the question whether,
by way of punishment, the payment of gratuity also could be withheld for
recovery of loss sustained by the government.

The appellant contended that 'pension' in Rule 9 of the Central Civil
G Services (Pension) Rules 1972 did not inCliide gratuity. He relied on the
amendment made to Rule 9 in 1991 wherein ·~toity was expressly in-
cluded in Rule 9, and submitted that prior to the amendment Rule 9 could
not be construed to confer the power of withholding gratuity in addition
to pension.

H In reply it was contended that the 1991 amendment was merely
318

)
JARNAILSINGH v. SECY. MIN. OF HOME AFFAIRS [VERMA,J,] 319

clarificatory as was evident from the definition of 'pension' in Rule 3(1)(o) A
of the Rules. Reference was also made to Article 366(17) of the Constitu~
ti on.

Dismissing the appeal, the Supreme Court,

HELD: 1. From the definition of 'pension' in Rule 3(1)(o) of the B
Rules it is clear that ordinarily the word 'pension' wherever used in the
Rules includes gratuity except where it is used in contradistinction to
gratuity. [321-A]

'Pension' as used in Rule 9(1) read with Rule 3(1)(o) includes
gratuity, since it is not used in contradistinction to gratuity•. [321-E] C

2. The amendment to Rule 9(1) by the Central Civil Services (Pen-
sion) Third Amendment Rules 1991 wherein the term 'pension' has been
substituted by the expression 'pension or gratuity, or both' is merely
clarificatory. [321-G] D
Rule 3(l)(o) was not brought to the notice of the court. in D.V.
Kapoor's case. [322-D]

D. V. Kapoor v. Union of India & Ors., [1990] 4 SCC 314 differed from
. F.R. Jesuratnam v. Union of India, [1990] Supp SCC 640, referred to. E
3. Rr. 69(1)(c), 71 and 73 of the Rules, and Article 366(17) of the
Constitution also supports this view.

CIVIL APPELLATE JURISDICTION : Civil Appeal No.5158 of
~ F
From the Judgment and Order dated 31.7.1989 of the Central Ad-
ministrative Tribunal, Delhi in Regn. No. O.A. 1326 of 1988.

S.S. Rana for the the Appellant.
G
Altaf Ahmad, Addi. Solicitor General, C.V.C. Rao and Hemant
Sharma for the Respondents.

The Judgment of the Court was delivered by

VERMA, J. Leave granted. H
320 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A The appellant, J arnail Singh, retired from the post of Under
Secretary in -the Ministry of Home Affairs, Government of India on 31st
March, 1986. By the Order dated 26.5.1988, the President of India directed
that the full monthly pension and the entire amount of death-cum-retire-
ment gratuity, otherwise admissible to the appellant, be withheld on a
permanent basis. This direction was given on account of serious ir-
B regulariti~s found to have been committed by the appellant in an inquiry
held for the purpose and in consultation with the Union Public Service
Commission. The appellant challenged this Order before the Central Ad-
ministrative Tribunal which has rejected the appellant's contention and
dismissed the application made for quashing this Order. Hence this appeal
c against the Tribunal's Order by special leave.

Notice on the petitioner's special leave petition was confined only to
the question whether, by way of punishment, the payment of gratuity also
could be withheld, for recovery of loss sustained by the Government. This
D appeal is, therefore, confined to this question only.

The contention of learned counsel for the appellant is that the
expression 'pension' in Rule 9 of the Central Civil Services (Pension) Rules,
1972 did not include 'gratuity' to enable withholding of payment of gratuity
in addition to withholding the pension amount. In support of this argument,
E - the amendment made in these Rules in 1991 to expressly include 'gratuity'
also in Rule 9, in addition to 'pension', is relied on. It is submitted that
prior to the 1991 Amendment, Rule 9 could not be construed to confer
that power in respect of 'gratuity' also in additional to 'pension'. In reply,
the learned Additional Solicitor General contended that the amendment
F made in 1991 is merely clarificatory which is evident from the fact that the
the word 'pension' as defined in Rule 3(1)(o) of these Rules includes
'gratuity'. Reference is also made to Article 366(17) of the Constitution of
India to indicate thal conceptually pension includes gratuity. In our
opinion, the contention of learned counsel for the appellant cannot be

G
accepted.

Rule 3 of the C.C.S. (Pension) Rules, 1972 contains the definitions.
--
'I
I

Clause (o) in sub-rule (1) of Rule 3 is as under:-
...
'"pension' include~ gratuity except when the term pension
H is used in contradistinction to gratuity;"

r
_,
JARNAIL SINGH v. SECY. MIN. OF HOME AFFAIRS [VERMA, J .] 321

From this definition of the word 'pension', it is dear that ordinarily the A
word 'pension' wherever used in these Rules includes gratuity except when
the term 'pension' is used in contradistinction to gratuity.

Rule 9, to the extent it is relevant for our purpose, is an under:-
- "9. Right of President to withhold or withdraw pension.
- (1) The President reserves to· himself the right of with-
B

holding or withdrawing a pension or part thereof, whether
permanently or for a specified period, and of ordering
recovery from a pension of the whole or part of any
pecuniary loss caused to the Government, if, in any C
departmental or judicial proceedings, the pensioner is
found guilty of grave misconduct or negligence during the
period of his service, including service rendered upon
re-employment after retirement:

Provided that the Union Public Service Commission shall D
be consulted before any final orders are passed :

xxx xxx xxx xxx''

Bearing in mind the definition of the term 'pension' in Rule 3{1)(o), the
term 'pension' used in Rule 9(1) must be construed to include gratuity E
since the term 'pension', in the context, is not used in contradistinction to
gratuity. Learned counsel for the appellant, however, referred to the
amendment made in Rule 9(1) by the Central Civil Services (Pension)
Third Amendment Rules, 1991, whereby the term 'pension' has been
substituted by the expression 'pension or gratuity, or both' and consequen- F
tial amendments made in that sub-rule. The question is : Whether this
amendment made in 1991 indicates, as contended by learned counsel for
the appellant, that 'pension' alone could be withheld under Rule 9(1) and
not also the gratuity prior to the amendment of Rule 9(1) in 1991? In our
opinion, the definition of 'pension' in Rule 3(1)(o) quoted above negatives G
the appellant's contention and clearly indicates that the 1991 Amendment
is merely clarificatory and makes explicit that which was clearly implicit
prior to that Amendment by virtue of the definition of term 'pension' in
Rule 3(1)(o). This clarification appears to have been made only to remove
... the doubt created by the decisions relied on by counsel for the appellant
which are considered hereafter. H
'\

322 SUPREME COURT REPORTS [1992) SUPP. 3 S.C.R.

A Learned counsel for the appellant placed strong reliance on the
decision in D.V. Kapoor v. Union of India and Others, [1990) 4 SCC 314. It
was held in that case that the exercise of power by the President under
Rule 9 is hedged with the condition that a finding should be recorded

B
either in the departmental inquiry or a judicial proceeding that the person
had committed grave misconduct etc. in the discharge of his duty while in ·-
office; and in the absence of such a finding, the President has .no authority
to impose the penalty of withholding the pension or to order recovery of
the pecuniary loss. There was no such clear finding recorded in that case.
That decision was based primarily on this point which was sufficient to
sustain the conclusion reached. However, in para 10 (SCC) of that judg-
c ment, it was further said that no provision of law was shown to indicate
that the President is empowered to withhold gratuity as well. It is, there-
fore, clear that the definition of the term 'pension' in Rule 3(1)(o) was not. ,.
brought to the notice of the Bench deciding D. V. Kapoor's case, which ,,
__

omission led to the making of this further observation after· holding that
D the condition precedent for exercise of the power was absent. We are,
therefore, with respect, unable to agree with this further observation in
D. V. Kapoor to the effect that the power of the President in Rule 9 prior
to its amendment in 1991, was confined only to withholding pension and it
did not extend to gratuity as well.

E Another decision relied on by learned counsel' for the appellant is
P.R. Jesuratnam v. Union of India and Others, [1990} Supp SCC 640. In that
case, there is no discussion and the condusion alone is stated. For the
reasons we have already given, .we cannot persuade ourselves to concur
with the view that prior to the 1991 Amendment there was no legal
F provision empowering the authorities to forfeit the gratuity payable to an
employee. In both these decisions', this conclusion was reached without any
reference to, and consideration of, the definition .of the term 'pension' in
Rule 3(1)(o) quoted above. Accordingly, we regret our inability to concur
with that view. Obviously, it is these decisions which led to the aforesaid
clarificatory amendment of Rule 9(1) in 1991.
G
Reference to some other provisions in the Central Civil Services
(Pension) Rules, 1972 supports the view we have taken. Rule 69(1)(c)
r
provides that no gratuity shall be paid to the Government servant until the
conclusion of the departmental or judicial proceedings and issue of final ...
H orders thereon.· This provision is indicative of the power to withhold
JARNAILSINGH v. SECY. MIN. OF HOME AFFAIRS [VERMA,J.] 323

payment of gratuity and its payment being subject to the final outcome of A
any pending departmental or judicial proceeding against the Government
servant. Rules 71 and 73 relating to recovery and adjustment of Govern-
ment dues and the express provision in Rule 73(3) for adjustment of dues
against the amount of death-cum-retirement gratuity payable to the
Government servant .also reinforce this conclusion. Article 366 of the
Constitution of India contains the definitions for the purpose of the Con- B
stitution and there in clause (17) is defined 'pension' to include gratuity as
well. This definition of 'pension' in the Constitution also indicates that
conceptually the term 'pension' includes gratuity. In Rule 3(1)(o) of the
Central Civil Services (Pension) Rules, 1972, the term 'pension'·is defined
to include gratuity except when the term 'pension' is used in contradistinc- c
tion to gratuity, in consonance with the basic concept. The contention of
the appellant was, therefore, rightly rejected by the Tribunal.

Consequently, the appeal is dismissed. In the circumstances of the
case, there will be no order as to costs.

U.R. Appeal dismissed.