Holding

The pension rule does not bar criminal prosecution; the provisions of the Criminal Procedure Code prevail and, for offences punishable with imprisonment exceeding three years, no limitation period applies, with sanction‑obtaining time excluded.

Summary

Respondent K.R. Pangare, a retired Deputy Engineer of the Maharashtra Public Works Department, was charged in 1990 with multiple offences under the Indian Penal Code and the Prevention of Corruption Act. Although sanction for prosecution was obtained in August 1989, he challenged the criminal proceedings before the Bombay High Court, arguing that Rule 27(3) of the Maharashtra Civil Services (Pension) Rules, 1982 imposed a four‑year limitation for instituting any proceeding after retirement. The High Court accepted this argument and quashed the case. On appeal, the Supreme Court held that the Criminal Procedure Code governs limitation for criminal offences; for offences punishable with imprisonment exceeding three years there is no limitation period, and the time taken to obtain sanction is excluded under Section 470(3). Consequently, Rule 27 relates only to the right to withhold or withdraw pension and cannot bar a criminal trial. The appeal was allowed, the High Court order set aside, and the trial directed to proceed.

Issues considered

Whether Rule 27 of the Maharashtra Civil Services (Pension) Rules, 1982 imposes a limitation period that bars criminal prosecution of a retired government servant.
Whether the limitation provisions of the Criminal Procedure Code override the pension rule.
Whether the period spent obtaining sanction for prosecution is excluded from the limitation period.

Legislation cited

Code of Criminal Procedure, 1973s. 4, s. 468, s. 470
Indian Penal Code, 1860s. 109, s. 120-B, s. 406, s. 420, s. 465, s. 466, s. 467, s. 468, s. 471, s. 477
Maharashtra Civil Services (Pension) Rules, 1982s. Rule 27
Prevention of Corruption Act, 1947s. 5(1)(c)(d), s. 5(2)

Subjects

criminal prosecutionlimitation periodpension rulesgovernment servantIPCPrevention of Corruption ActCrPCRule 27retirement

Judgment

A STATE OF MAHARASHTRA
v.
..
KESHA V RAMCHANDRA PAN GARE AND ANR.

NOVEMBER I, 1999

B [K.T. THOMAS AND M.B. SHAH, JJ.]

Penal Code, 1860/Prevention of Corruption Act, 1947/Criminal
Procedure Code, 19731 Maharashtra Civil Services (Pension) Rules. 1982:
Sections 120-B, 406, 420, 465, 466, 467, 468, 471, 477 and 1091 Sections
C 5(1) (d) and 5(2)/ Sections 4, 468 (2) and 470 (3)/Rule 27 (3)-Respondent
charged for the offences of corruption, misappropriation etc. after his
retirement-Cognizance taken four years after commission of offence-
Sanction obtained-Respondent challenged the proceedings in writ petition- (

Protection under Pension Rule 27 sought on the ground of lapse offour years
D after the commission of offence-Writ Petition allowed and proceedings
quashed by the Court-On appeal, Held: Pension rule 27 is in the context
of right of the Government to withold or withdraw pension-Rule 27 does
not effect criminal trial under Cr.P.C.-There is no period of limitation in
Cr.P.C. for an offence punishable with imprisonment exceeding three years-
Time required for obtaining sanction is excluded-Trial against respondent
E not barred by /imitation-Service law.

Respondent No. 1 who was working in the Public Works Department in
the State of Maharashtra retired from service in 1987. In 1990, R-1 alongwith
some others was chargesheeted for offences under Sections 120-B, 406, 420,
465, 466, 467, 468, 471, 477 and 109 IPC alongwith Section S(l)(c) read
F with Section 5(2) of the Prevention of Corruption Act, 1947. The Special Court,
after obtaining the sanction, took cognisance and issued process. The
respondents challenged the said proceedings before the High Court in a writ
petition on the ground that the complaint was filed beyond the period of four
years from the date of commission of the offence and therefore, it was barred
G by Rule 27 (3) of the Maharashtra Civil Services (Pension) Rules, 1982. The
said writ petition was allowed and the proceedings were quashed. Hence this
appeal ,
The appellant contended that Rule 27 of the Pension Rules cannot have
an overriding effect to the provisions of Cr.P.C. It was also contended that
H 260
STATE OF MAHARASHTRA v. K.R. PANGARE 261
Rule 27 of the pension Rules was not applicable to prosecution in a criminal A
court.

Allowing the appeal, the Court

HELD: l.l. Section 4 of the Criminal Procedure Code, 1973 specifically
provides that all offences under the IPC shall be investigated, inquired into, B
tried and otherwise dealt with according to the provisions contained therein.
Admittedly, against respondent No. 1 chargesheet is filed for the offences
punishable under IPC and Prevention of Corruption Act, 1947 and he is to be
tried as per the procedure prescribed under the Cr.P.C. [264-B-C)

1.2. Chapter XXXVI of Cr.P.C. containing Sections 467 to 473 deals C
with limitation for taking cognizance of certain offences. Section 468 provides
for a bar for taking cognisance of an offence after the expiry of period of
limitation prescribed under sub-section 2. Period of three years is provided
for an offence punishable with imprisonment for a term exceeding one year
but not exceeding three years. If the offence is punishable with imprisonment D
for a term exceeding three years, then there is no period of limitation
prescribed under the Cr.P.C. Further sub-section 3 of Section 470 excludes
the time required for obtaining sanction where the previous sanction of the
Government or any other authority is required for the institution of any
prosecution for an offence. Hence, it is apparent that as the offences for which
respondent No. 1 is charge-sheeted are punishable with imprisonment for a E
term exceeding three years, there is no period of limitation prescribed under
Section 468 Cr.P.C. In any case, where period of limitation is required to be
taken for consideration, sub-section 3 of Section 470 Cr.P.C. excludes the
period required for obtaining previous sanction for institution of prosecution.
In the present case, sanction of prosecution was obtained on 25-08-1989. F
Hence, if at all the period of limitation is applicable, the time required for
obtaining sanction is to be excluded. Therefore, it cannot be stated that the
prosecution instituted against the respondent is barred by any period of
limitation. [264-8, C, F, G, H; 265-A)

2.1. Whether or not a government sen'ant should be prosecuted for an G
offence committed by him obviously cannot be treated to be something
pertaining to conditions of service; therefore, making a provision that a
government servant, even if he is guilty of grave misconduct or negligence
which constitutes an offence punishable either under IPC or the Prevention
of Corruption Act or an analogous law should be granted immunity from such H
262 SUPREME COURT REPORTS [1999) SUPP. 4 S.C.R.

A prosecution after the lapse of a particular period so as to provide incentive
for efficient work, would not only be against public policy but would also be
--
counter-productive. Such a situation cannot be created by framing a rule under
Article 309 of the Constitution laying down an embargo on prosecution as a
condition ofservice. (267-G. H; 268-A)

B State of Punjab v. Kai/ash Nath, (1989) 1 SCC 321 and Prabhakar
Govind Sawant v. State of Maharashtra and Ors., (1991) Maharashtra Law
Journal 1051, relied on.

2.2. Rule 27 (1) of the Maharashtra Civil Services (Pension) Rules,
C 1982 provides right of Government to withhold or withdraw a pension and in
that context the said rule is to be interpreted. Under the said rule, the
Government may, inter alia, order withholding or withdrawing a pension or
any part thereof, if, in any departmental or judicial proceedings, the pensioner
is found guilty of grave misconduct or negligence during the period of his
D service. It also empowers the government to order the recovery from such
pension of the whole or part of any pecuniary loss caused to the government
if, in any departmental or judicial proceedings, the pensioner is found guilty
of grave misconduct or negligence during the period of his service. If
something is to be recovered from the pension payable to the employee then
the judicial proceeding or departmentat enquiry is required to be started
E within the period prescribed under sut>'.rule 2 or 3 but that would not debar
the prosecuting agency from launching the prosecution for the offence of grave
misconduct This rule is to be read with the previous Rule 26 which provides
that future good conduct shall be an implied condition of every grant of pension
and Government may withhold or withdraw pension or part thereof, if the
F pensioner is convicted of a serious crime or is found guilty of grave
misconduct But Rules 26 and 27 of the Pension Rules do not lay down a!IY
period o.f limitation for prosecution or could not supersede the period of
limitation prescribed under the Cr.P.C. Rule 27 is only meant for the purpose
of granting. Withholding or withdrawing the pension and hence its operation
would be in the limited field of granting or withholding pension to the
G government employees. The provisions ofCr.P.C. shall have an overriding
effect and shall prevail notwithstanding any provision in the Pension Rules
framed by the State Government. (267-F, G, H; 268-A-E)

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
H I 169 of 1999.
STA TE OF MAHARASHTRA v. K.Jl. PAN GARE [SHAH, J.] 263

- From the Judgment and Order dated 18.9.98 of the Bombay High Court
in Crl. W.P. No. 484of1991.
A

Gopal Balwant Sathe for the Appellan~.

Ajay Majithia and Yash Pal Dhingra for the Respondent No. I.
B
The Judgment the Court was delivered by

SHAH, J. Leave granted.

Respondent No. 1 was serving as Deputy Engineer, P.W.D. in the State
of Maharashtra. On 13 October 1990, a charge sheet No. 247 of 1990 was c
filed against the respondent and several other officers of the Department
before the Special Court, Satara, and the case was numbered as Special Case
... No. 5 of 1990. Respondent retired on 31 December 1987 as Deputy Engineer.
Necessary sanction for prosecuting the respondent for the offences punishable
under sections 120-B, 406, 420, 465, 466, 467, 468, 471, 477 and 109 of the l.P.C.
D
and Section 5(1)(c)(d) read with Section 5(2) of the Prevention of Corruption
Act, 1947 was obtained. The judge of the special court took cognisance of
the offences and issued process against .the respondent.
~~-,.
,

Thereafter the respondent filed Criminal Writ Petition No. 484 of 1991
before the High Court of Judicature at Bombay for quashing the criminal E '
proceedings on the ground that the complaint was filed beyond the period
of four years from the date of the commission of the offence and therefore,
~
it was barred by Rule 27 (3) of the Maharashtra Civil Service (Pension)
Rules, 1982 (hereinafter referred to as "the Pension Rules"). The High Court
accepted the plea and held that Rule 27 of the Pension Rules was directly
applicable and it is mandatory that prosecution should be launched within F
four years from the date of commission of offence. Hence, the court allowed
the writ petition and quashed the proceedings in Special Case No. 5 of 1990
against the respondent. The said judgment of the learned Single Judge is
being challenged now.
G

--
On the basis of the aforesaid Rule, learned counsel for the appellant
submitted that in view of the provisions of Criminal Procedure Code (for
short "the Code"), the bar contained in Pension Rule 27 cannot be invoked
and it cannot have any overriding effect to the provisions of the Code. Even

.~.
on merits, sanction to prosecute was received on 25 August, 1989 and therefore
also, the submission of the charge-sheet before the Court on 30 October, 1990 H
264 SUPREME COURT REPORTS [1999) SUPP. 4 S.C.R.

A was within time. It was alternatively contended that Rule 27 of the Pension
Rules would not apply to prosecution in a criminal court.
-
In our view, the contention raised by the learned counsel for the
appellant requires consideration. Section 4 of the Code specifically provides
B that all offences under the Indian Penal Code shall be investigated, inquired
into, tried and otherwise dealt with according to the provisions contained
therein. Admittedly, against respondent no. 1 charge-sheet is filed for the
offences punishable under the Indian Penal Code and Prevention of
Corruption Act and he is to be tried as per the procedure prescribed under
the Cr. P.C. Chapter XXXVI containing Sections 467 to 473 deals with limitation
C for taking cognisance of certain offences. Section 468 provides for a bar for
taking cogn!sance of an offence after !he expiry of period of limitation prescribed
under sub-section (2) thus:

"468(2)-The period of limitation shall be-

D (a) six months, if the offence is punishable with fine only;
(b) one year, if the offence is punishable with imprisonment for a
term not exceeding one year;
(c) three years, if the offence is punishable with imprisonment for
. a term exceeding one year but not exceeding three years."
E
Period of three years is provided for an offence punishable with
imprisonment for a term exceeding one year but not exceeding three years.
If the offence is punishable with ·imprisonment for a term exceeding three
years then there is no period of limitation prescribed under the Criminal
Procedure Code. Further sub-section (3) of Section 470 excludes the time
F required for obtaining sanction ~here the previous sanction of the Government
or any other authority is required for the institution of any prosecution for
an offence. Hence, it is apparent that as the offences for which respondent
no. I is charge-sheeted are punishable with an imprisonment for a term
exceeding three ye11rs there is no period of limitation prescribed under
G Section 468 Cr. P.C. In any case, where period of limitation is required to
be taken for consideration, sub-section (3) of Section 470 Cr. P.C. excludes
the period required for obtaining previous sanction for institution of
prosecution. In the present case, sanction of prosecution was obtained on
25.8.1989. Hence, if at all the period of limitation is applicable, the time
-
required for obtaining sanction is to be· excluded. Therefore, it cannot be
H stated that the prosecution instituted against the respondent is barred by any
STA TE OF MAHARASHTRA v. K.R. PANGARE [SHAH,J.) 265
period of limitation. A
The next question is - what would be the effect of Pension Rules which
prescribe a period of limitation ? For considering the contentions urged by
learned counsel for the parties, it would be necessary to refer to relevant part
of Rule 27 of the Maharashtra Civil Services (Pension) Rules, 1982, which
~~~~ B
"Rule 27. Right of Government to withhold or withdraw pension.-

(I) Government may, by order in writing, withhold or withdraw a
pension or any part of it, whether, permanently or for a specified
period, and also order. the recovery from such pension to whole C
or part of any pecuniary loss caused to Government, if, in any
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:
D
Provided..... .

Provided..... .

(2) (a) The departmental proceedings referred to in sub-rule(!), if
instituted while the Government servant w~ in service whether E
before his retirement or during his re-employment, shall, after
the final retirement of the Government servant, be deemed to
be proceedings under this rule and shall be continued and
concluded by the authority by which they were commenced in
the same manner ~ if the Government servant had continued
in service. F
(b) The departmental proceedings, if not instituted while the
Government servant w~ in service, whether before his retirement
or during his re-employment,-

(i) shall not be instituted save with the sanction of the G
Government.

(ii) shall not be in respect of any event which took place
more than four years before such institution, and

(iii) shall be conducted by such authority and at such place H
266 SUPREME COURT REPORTS (1999] SUPP. 4 S.C.R.

A as the Government may direct and in accordance with the
procedure applicable to the departmental proceedings in
which. an order of dismissal from service could be made in
relation to the Government servant during his service.

(3) No judicial proceedings, if not instituted while the government
B servant was in service, whether before his retirement or during
his re-employment shall be instituted in respect of a cause of
action which arose or in respect of an event which took place
more than four years before such institution.

'(4) ...................... .
c
(5) ·······················
(6) ...................... .

Similar contention was dealt with by this Court in State of Punjab v.
D Kai/ash Nath, (1989] 1 sec 321, wherein the Court considered similar
Service Rule 2.2 of the Punjab Civil Service Rules. The Court held that
whether or not a government servant should be prosecuted for an offence
committed by him obviously cannot be treated to be something pertaining
to conditions of service; therefore, making a provision that a government
servant, even ifhe is guilty of grave misconduct or neglience which constitutes
E an offence punishable either under the Penal Code or the Prevention of
Corruption Act or an analogous law should be granted immunity from such
prosecution after the lapse of a particular period so as to provide incentive
for efficient work would not only be against public policy but would also be
counter-productive. Such a situation cannot be created by framing a rule
F under Article 309 of the Constitution ·laying down an embargo on prosecution
as a condition of service. The court further held (in para 11 & 12) as under:-

"( 11 ) .... If a rule containing an absolute or general embargo on
prosecution of a government servant after his retirement for grave
misconduct or negligence during the course of the service does not
fall within the purview of laying own conditions of service under
G Article 309, such a provision cannot in the purported exercise of
power under Article 309 be made by either incorporating it in the
substantive clause of a rule or in the proviso thereto. In view of what
has been said above and keeping in mind the scope of rule making
power under Article 309 of the Constitution, the third proviso to Rule
H 2.2 cannot be interpreted as lying down an absolute or general embargo
STATE OF MAHARASHTRA v. K.R. PANG ARE [SHAH, J.] 267

on prosecution of a government servant if the conditions stated A
therein are satisfied. Even if on first impression the said rule may
appear to be placing such an embargo it has to be interpreted by
taking recourse to the well settled rule of reading down a provision
so as to bring it within the framework of its source of power without,
of course, frustrating the purpose for which such provision was made. B
Clause (b) of Rule 2.2 which can be called the substantive clause
reserves to the government the right of withholding or withdrawing
a pension or any part of 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 the government if, in
_ a-departmental or judicial proceeding, the pensioner is found guilty C
of grave misconduct or negligence during the period of his service,
-·including service rendered upon re-employment after retirement.

(12). The purpose of the third proviso thereto is, as is the scope of
a proviso, to carve out an exception to the right conferred on the
government by the substantive clause if the conditions contemplated D
by the proviso are fulfilled. This purpose can be achieved if the said
proviso by adopting the rule of reading down is interpreted to mean
that even if a government servant is prosecuted and punished in
judicial proceedings instituted in respect of cause of action which
arose or an event which took place more than four years before such
institution the government will not be entitled to exercise the right E
conferred on it by the substantive provision contained in blause (b)
with regard to pension of such a government servant."
Similarly, in the present case, Rule 27 (I) provides right of Government
to withold or withdraw a pension and in that context the said rule is to be
interpreted. Under the said rule, the Government may inter alia order F
withholding or withdrawing a pension or any part thereof, if, in any
departmental or judicial proceedings, the pensioner is found guilty of grave
misconduct or negligence during the period of his service. It also empowers
the government to order the recovery from such pension of the whole or part
of any pecuniary loss caused to the government if, in any departmental or G
judicial proceedings the pensioner is found guilty of grave misconduct or
negligence during the period of his service. In the context of the second part
of sub rule (I), sub rule (3) is to be read and interpreted. If something is to
be recovered from the pension payable to the employee then the judicial
proceeding or departmental inquiry is required to be started within the period
prescribed under the sub-rule (2) or (3) but that would not debar the H
268 SUPREME COURT REPORTS (1999] SUPP. 4 S.C.R.

A prosecuting agency from launching the prosecution for the offence of grave
misconduct. This rule is to be read with the previous Rule 26 which provides
that future good conduct shall be an implied condition of every grant of
pension .and Government may withhold or withdraw a pension or part thereof, \.
if the pensioner is convicted of a serious crime or is found guilty of grave
misconduct. But the Pension Rules 26 and 27 do not lay down any period
B of limitation for prosecution or could not supersede the period of limitation
prescribed under the Cr.P.C. Rule 27 is only meant for the purpose of
granting, withholding or withdrawing the pension and hence its operation
would .be in the limited field of granting or withholding pension to the
government employees.
c Relying upon the decision in Kai/ash Nath (Supra), the learned Single
Judge of the Bombay High Court in Prabhakar Govind Sawant v. State of
Maharashtra and others, (1991) Maharashtra Law Journal 1051, rejected the
contention that the prosecution was barred under Rule 27 of the Pension
Rules as it was launched after the period of four years. In that case, the
D learned Judge also referred to Article 254 of the Constitution and held that
the provisions of the Criminal Procedure Code shall have an overriding
effect and shall prevail notwithstanding any provision in the Pension Rules
framed by the State Government. It is unfortunate that the attention of the
learned Single Judge was not drawn to the said decisions which are of
binding nature at least as far as the High Court is concerned. That apart,
E learned Single Judge, instead of jumping into a conclusion solely based on
Rule 27 of the Pension Rules should have examined the relevant provisions
of the Code before axing down the criminal prosecution in respect of serious
offences.

F In the result, the appeal is allowed. The impugned order dated 18.9.1998
passed by the High Court in Criminal Writ Petition No. 484of1991 is quashed
and set aside. The trial court is directed to proceed with the matter.
~
RC.K. Appeal allowed.