STATE OF WEST BENGALversusHARESH C. BANERJEE AND ORS.

A                            STA TE OF WEST BENGAL
                                           v.
                         HARESH C. BANERJEE AND ORS.

                                 AUGUST 30, 2006

B                  [Y .K. SABHARW AL,CJ., C. K. THAKKER AND
                           P.K. BALASUBRAMANY AN.JJ.]


          Service Law:

c         West Bengal Services (Death-cum-Retirement Benefit) Rules, 1971-
    Rule 10(/)-Pension-Withholding of-By State-Constitutional validity a/-
    Held: The Rule being the authority of law under which the pension could be
    withheld, the same cannot be held ultra vires even at the time when pension
    was a property to which Article 19(1)(/) was applicable-Constitution of
D   India, 1950-Articles 19(/)(f) (since repealed) and 309. proviso thereto.

          The question for consideration in the present appeal was whether Rule
    10(1) of West Bengal Services (Death-cum-Retirement Benefit) Rules, 1971
    framed under proviso to Article 309 of the Constitution of India, providing
    for withholding of the pension would ipso facto be ultra vires, being violative
E   of Article 19(1) (I) as it stood in 1971 when Rules were framed.

          Allowing the appeal, the Court

          HELD: l. Rule 10(1) of West Bengal Services (Death-cum-Retirement
    Benefit Rules, 1971 is the authority of law under which the pension could be
F   withheld on compliance of stipulations of the rule. Such a rule could not be
    held ultra vires even at a point of time when pension was a property to which
    Article 19(1)(f) of the Constitution of India was applicable.1624-E-FI

          Deokinandan Prasad v. The State of Bihar and Ors., 1197112 SCC 330,
    relied on.
G
          2. Various State Rules or Regulations vest power for withholding or
    reduction of pension on compliance of principles of natural justice. The
    question of an order withholding or reducing pension being invalid and bad
    in law on a legally permissible ground is one thing but to hold the rule ultra

H                                        620
        STATE OF WEST BENGAL 1· HA RESH C. BANERJEE [YK SABHARWAL, CJ]      621

vires is another. If the Government incurs pecuniary loss on account of A
misconduct or negligence of a Government servant and if he retires from
service before any departmental proceedings are taken against him, it is open
to the State Government to initiate departmental proceedings, and if in those
proceedings, he is found guilty of misconduct, negligence or any other such
act or omission as a result of which Government is put to pecuniary loss, the B
State Government is entitled to withhold, reduce or recover the loss suffered
by it by forfeiture or reduction of pension. State Government could not direct
cut in pension of officers without giving a reasonable opportunity of hearing.
State Government's power to reduce or withhold pension by taking proceedings
against a Government servant, even after his retirement is expressly preserved
by the rules. (624-A-EI                                                        C
      State of Uttar Prades'1 v. Brahm Datt Sharma and Anr., (19871 2 SCC
179; State of Punjab v. K.R. Erry1, (197311SCC120 and State of Maharashtra
v. MH. Mazumdar, 1198812 SCC 52, relied on.

      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2579 of 1998.                D
      From Fin:1I ludgment and Order dated 6.5.1996 High Court of Calcutta
in F.M.A.T. No. I~02/1998.

      Tapas Ray, fara Chandra Sharma and Neelam Shanna for the Appellant.
                                                                                   E
      Amlan Kum~.r Ghosh (NIP) for the Respondent.

      The Judgment of the Court was delivered by

      Y.K. SABHARWAL, CJ. The validity of Rule 10(1) of the West Bengal
Services (Death-cum-Retirement Benefit) Rules, 1971 [for short 'the Rules'] is     F
in question in this appeal. The Rules have been framed in exercise of power
under proviso to Article- 309 of the Constitution of India. Rule I0( I) provides
for withholding of pension and reads as under :                         ·

        "10. Right of the Governor to withhold pension in certain cases. (I)
        The Governor reserves to himself the right of withholding of G
        withdrawing a pension or any part of it whether pennanently or for
        a specified period, and the right of ordering the recovery from a
        pension of the whole or part of any pecuniary lt-_, :aused to
        Government, if the pensioner is found in a departmental or judicial
      . proceeding to have been guilty of grave misconduct or neglif;ence,
        during the period of his service, including service rendered on re- H
    622                     SUPREME COURT REPORTS (2006) SUPP. 5 S.C.R.

A         employment after retirement :

          Provided that

          (a) such departmental proceeding if instituted while the officer was
              in service, whether before his retirement or during his re-
              employment, shall after the final retirement of the officer, be
B
              deemed to be a proceeding under this article and shall be
              continued and concluded by the authority by which it was
              commenced in the same manner as if the officer had continued
              in service;
          (b) such departmental proceedings, if not instituted while the officer
c             was in service, whether before his retirement or during his re-
              employment.
                (i)   shall not be instituted save with the sanction of the Governor;

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

                (iii) shall be conducted by such authority and in such place as
                      the Governor may direct and in accordance with the procedure
                      applicable to departmental proceedings in which an order of
                      dismissal from service codd be made in relation to the officer
E                     during his service;
          (c)   no such judicial proceeding, if not instituted while the officer was
                in service, whether before his retirement or during his re-
                employment shall be instituted in respect of a cause of action
                which arose on an event which took place more "than four years
F               before such institution; and
          (d) the Public Service Commission, West Bengal, shall be consulted
              before final orders are passed.
          Explanation. - For the purpose of this article -

G         (a) a departmental proceeding shall be deemed to have been instituted
              on the date on which the statement of charges is issued to the            -....
              officer or pensioner, or if the officer has been placed under
              suspension from an earlier date, on such date; and
          (b) a judicial proceeding shall be deemed to have been instituted -
H
            STATEOFWESTBENGAL 1·. HARESHC. BANERJEE[Y.K. SABHARWAL,Cl]            623

•                (i) in the case of criminal proceeding, on the date on which the         A
                     complaint or report of police officer, on which the Magistrate
                     takes cognizance, is made, and

                 (ii) in the case of a civil proceeding, on the date on which the
                      plaint is presented or, as t11e case may be, an application is
                      made to a Civil Court."                                             B
          While granting leave to examine the vires of Rule I0( I), it was directed
    that even if the appeal succeeds, the benefit available to respondent No. I
    as per the judgment of the High Court will not be recalled.

          The High Court by the impugned judgment has held Rule 10(1) to be               C
    ultra vires the provisions of Articles 19(1 )(f) and 31(1) of the Constitution.
    It was held that the pension was a property and its payment does not depend
    upon the discretion of the Government.

          Pension is not a bounty payable on the sweet-will and the pleasure of
    the Government and to receive pension is a valuable right of i. Government D
    servant is a well-settled legal proposition. The question in the present case,
    however, is not about the deprivation of the said right by the Government by
    an executive order but is about the constitutional validity of Rule 10(1)
    providing for withholding of pension or part thereof in certain cases.

          Articles 19( 1)( t) and 31 (I) have been repealed by the Constitution (Forty-   E
    Fourth Amendment) Act, 1978 w.e.f. 20th June, 1979. The right to property is
    no longer a fundamental right. It is now a constitutional right, as provided
    in Article 300A of the Constitution. Right to receive pension was a fundamental
    right at the time of framing of Rules in 1971. The question is whether a Rule
    framed under proviso to Article 309 of the Constitution providing for                 F
    withholding of the pension would ipso facto be ultra vires, being violative
    of Article 19(l)(f) as it stood in 1971 when Rules were framed.

          The High Court has, in the impugned judgment, made reference to a
    decision of this Court in Deokinandan Prasad v. The State of Bihar and Ors.,
    [1971] 2 sec 330 for coming to the conclusion that the rule in question is G
    ultra vires. In the said case, this Court held that the right to receive pension
    was wrongly wit!iheld by an executive order. The Judgment in Deokinandan
    Prasad's .:ase in fact lends support to the vires of the rule since it was held
    in that case that an employee can be deprived of the pension by an authority
    of law. That authority, in the present case, is contained in the rules [Rule H
    624                    SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A I0(1 )], that were framed providing for withholding of the pension.
         Various State Rules or Regulations vest power for withholding or
  reduction of pension on compliance of principles of natural justice. The
  question of an order withholding or reducing pension being invalid and bad
  in law on a legally permissible ground is one thing but to hold the rule ultra
B vires is another. In State of Uttar Pradesh v. Brahm Datt Sharma and Anr.,
  (1987] 2 SCC 179, this Court observed that ifthe Government incurs pecuniary
  loss on account of misconduct or negligence of a Government servant and
  if he retires from service before any departmental proceedings are taken
  against him, it is open to the State Government to initiate departmental
C proceedings, and if in those proceedings, he is found guilty of misconduct,
  negligence or any other such act or omission as a result of which Government
  is put to pecuniary loss, the State Government is entitled to withhold, reduce
  or recover the loss suffered by it by forfeiture or reduction of pension. In
  State of Punjab v. KR. Erry, [1973] I SCC 120, it was held that the State
  Government could not direct cut in pension of officers without giving a
D reasonable opportunity of hearing. In State of Maharashtra v. MH. Mazumdar,
  [1988] 2 SCC 52, it was observed that the State Government's power to reduce
  or withhold pension by taking proceedings against a Government servant,
  even after his retirement is expressly preserved by the rules.

          Rule I0( 1) is the authority of law under which the pension could be
E withheld on compliance of stipulations of the rule. We are unable to appreciate
    how such a rule could be held ultra vires even at a point of time when
    pension was a property to which Article 19(l)(f) was applicable.

           In view of the above, we set aside the impugned judgment to the extent
F   it declares Rule 10( I) ultra vires. The appeal is allowed accordingly.

    K.K.T.                                                      Appeal allowed.