Holding

The State Government’s power under Rules 188 and 189 of the Bombay Civil Services Conduct, Discipline and Appeal Rules to reduce a retired servant’s pension and gratuity for unsatisfactory service is valid and the order reducing them by 50% is upheld.

Summary

The appellant, a former civil engineer of the erstwhile State of Junagadh, was compulsorily retired in 1961 and later deemed to have served until 1964 following a Supreme Court order. After his retirement, the Gujarat Government reduced his pension and gratuity by 50% under a show‑cause notice, invoking Rules 188 and 189 of the Bombay Civil Services Conduct, Discipline and Appeal Rules. The appellant challenged the reduction, arguing that the Junagadh Rules governed his service, that the Bombay Rules could not be applied, and that the reduction violated constitutional guarantees of natural justice. The Supreme Court held that the Bombay Rules expressly empower the State to reduce pension after retirement for unsatisfactory service, that the procedural requirements (show‑cause notice and opportunity to be heard) were satisfied, and that the pending departmental inquiries, though later deemed infructuous, justified the reduction. Consequently, the order reducing the pension and gratuity was upheld and the appeal dismissed.

Issues considered

Whether the State Government can reduce or withhold pension and gratuity of a retired government servant under Rules 188 and 189 of the Bombay Civil Services Conduct, Discipline and Appeal Rules.
Whether the appellant was governed by the Junagadh State Pension & Parwashi Allowances Rules, the Saurashtra Covenanting State Servants Rules, or the Bombay Civil Service Rules for the purpose of pension reduction.
Whether the reduction of pension and gratuity violates Article 311 of the Constitution of India or the procedural safeguards prescribed under the Bombay Rules.
Whether departmental inquiries that became infructuous upon retirement can be used as a basis for pension reduction.
Whether the show‑cause notice and the opportunity of hearing complied with Note I to Rule 33 of the Bombay Rules.

Legislation cited

Bombay Civil Services Conduct, Discipline and Appeal Rules, 1958s. 188, s. 189, s. Note I to Rule 33
Constitution of Indias. Article 309, s. Article 311
Junagadh State Pension & Parwashi Allowances Rules, 1932s. Clause 13, s. Clause 15, s. Clause 3

Subjects

pension reductiongovernment servantdisciplinary proceedingssuperannuationBombay RulesJunagadh Rulesconstitutional lawnatural justiceprocedural fairness

Judgment

A TAKHATRY SHIVADATTRAY MANKAD
v.
STATE OF GUJARAT
MAY 5, 1989
•
[G.L. OZA ANDS. RATNAVEL PAN!JlAN, JJ.]
B y
I
Bombay Civil Services Conduct, Discipline and Appeal Rules,
1958-Ru/es 188 & 189-Pension and gratuity-Reduction of-Pro-
ceedings-Whether can be taken after a Government servant's retire- ...
ment. '--,.._,

Junagadh State Pension & Parwashi Rules 1932-Rule 241-A,
c Clauses 3, 13 and 15-Government"servant-Reduction in pension and ~
gratuity-Whether permissible.

This appeal is directed against the order of the Gujarat High
Court upholding the order dated the 15th November, 1977 passed by
D the State of Gujarat whereby the amounts of gratuity and pension pay-
able to the appellant on superannuation were reduced by 50 per cent.

The appellant was born on January 15, 1909 and after obtaining a
Degree in Bachelor of Engineering (Civil) joined the service in the ~
former State of Junagarh and as such was governed by the Junagadh
E State Pension and Parwashi Allowances Rules of 1932 which were duly
codified and published in the Junagadh State Account Code, State of
Junagadh was integrated into the State of Saurashtra on 20.1.1949 and
the services of the appellant were absorbed in the State of Saurashtra.
The conditions of service of the absorbed servants were duly protected

F
and a proclamation providing a guaraDtee that the service conditions of
absorbed servants could not be varied to their disadvantage was issued
.\
on 20.1.49-that being the date of merger of the State.

The State of Saurashtra made the Saurashtra Covenanting State
Servants (Superannuation Age) Rules, 1955. Rule 3(i) thereof provided
that a Government servant shall, unless for special reasons otherwise
G directed by Government retire from service on his completing 55 years
of age. After the merger of the State of Saurashtra with State of -r·
Bombay the old Bombay Civil Service Rules, 1959 were made appli·
cable to Saurashtra area and on l. 7.59 the Bombay Civil Service Rules,
1959 were promulgated. As per clause (c)(2)(ii)(l) of Rule 161, Govern-
ment servants in the Bombay Service of Engineers Class I were to retire
H on reaching the a~e of 55 years.
214
TAKHATRY SHIVADATTRAY v. STATE OF GUJARAT 215

The appellant was compulsorily retired by the State on 12.10.1961
A
with effect from 12.1.1962 when he had completed the age of S3 years.
The appellant challenged that order by means of writ before the High
Court and having remained unsuccessful, he took up the matter before
this Court and this Court by its judgment dated 9.4.69 allowed the
appeal and declared that the appellant was entitled to remain in service
until he attained the age of SS years and that the impugned order B
compulsorily retiring him at the age of S3 years was invalid and
ineffective.

In order to give effect to this Court's order mentioned above, the
Government of Gujarat on 4.8.69 intimated the appellant that he will
be deemed to have remained in service uptil 14.1.64, when he attained
the age of 55 years. as he had attained that age prior to the decision of c
this Court.

In the meantime the age of superannuation of the employees of the
State of Gujarat had been raised from 55 years to S8 years. The appel-
lant· in order to take benefit of the change moved a writ petition before D
the High Court of Gujarat but remained unsuccessful. Thereupon he
filed a special leave petition before this Court. This Court by its order
dated 21.7.1975 declined to interfere. Thus the appellant was not
/>-. entitled to continue in service beyond SS years of age.

-
It may be mentioned that prior to his compulsory retirement there E
were three departmental inquiries pending against the appellant, on
grounds of slackness in supervision. overpayment to contractors and
loss to the Government and payment in advance of the receipt of goods.
The first inquiry was initiated on 6.2.61, second on 11.4.1963 and the
third on 17 .8.63. These inquiries remained pending against the appel-
lant till 197 i. F

The appellant filed yet another Special Civil Application No. 504
of i 97 ! before the High Court praying for issue of a writ of mandamus
directing the State to pay to the appellant all his outstanding salary.
allowances, including due inrrements after the efficiency .bar from
12.1.1 %l to 14.1.1964 together with 6% interest. An application for G
interim relief was also filed but was withdrawn later on the representa-
tion perhaps made by the State that the enquiries had become infruc-
tuous consequent to appellant's retirement.
::::'.:!;

ll!iJ'· In the meanwhile the State of Gujarat issued a show cause notice
dated 17. 7 .1971 to the appellant intimating him that the Government H
•
216 SUPREME COURT REPORTS [1989) 3 S.C.R.

considered his service record and did not find the same thoroughly
A
satisfactory for the reasons mentioned in the said notice and accord-
ingly the Government proposed to make 50% reduction both in the
payment of Gratuity and Pension admissible to him. The appellant
submitted his reply and these proceedings due to laches on the part of
the appellant went on for a considerable time and the Government
B passed the final order on 15.11.1977 reducing the Pension and Gratuity
by 50 per cent.
To challenge this Order the appellant again filed Special Civil
Application before the High Court for quashing the order reducing his
-~.. ·
Pension and gratuity. The High Court dismissed the application in
/imine on 8.3.1978 observing that in the present case the Government
c recorded reasons why it came to the conclusion that the petitioner's
Service was unsatisfactory and therefore, put a proportionate cut in the
Pension, as no case of discrimination was made out. The appellant,
preferred Letters Patent Appeal, against the order passed by the Single
Judge. His contention before the Division Bench was that he continued
to be governed by the Junagadh Rules in spite of the fact that the
D
Bombay Rules were sought to be made applicable to him. His alterna-
tive contention was that even if the Bombay Rules were to be made
applicable, so far as the question of payment was concerned, inasmuch
as they were not less advantageous on compulsory retirement, propor-
tionate pension was payable to the appellant under the Bombay Rules of -·~.
1959. The Division Bench held that under either set of Rules, it was
E open to the State Government to reduce the amount of pension payable
to the petitioner as his service had not been found satisfactory by the
State under Junagadh Rules as also under Bombay Civil Service Rules.
The High Court accordingly dismissed the Letter Patent Appeal. Hence
this appeal.
F It was contended on behalf of the appellant that the High Court
>>ent wrong in upholding the impugned order reducing the amounts
of pension & gratuity in exercise of its power under Rules 188 and
189 of the Bombay Rules, as it had already been ruled by this Court
in its judgment in Civil Appeal No. 409 of 1966; that Bombay Rules
could not be made applicable to the appellant. It was urged that the
G appellant was not governed by Saurashtra Rules either, and it was
asserted that either in the show cause notice or in the impugned order,
it is nowhere specifically stated as to under what set of Rules, the
impugned order imposing a cut in the Pension or Gratuity has been
passed. A contention was also raised based on clauses 3, 13 & 15 of Rule
241-A of Junagadh Rules stating that they operate in different fields. It
H was added that no inquiry as contemplated under Rule 189 had been
made and admittedly the State had stated before the High Court that
TAKHATRY SHIVADATTRAY v. STATE OF GUJARAT 217

the departmental inquiries had become infructuous consequent upon the
.A
retirement of the appellant.

According to the counsel for the State the appellant having been
retired in pursuance of a judicial order passed by this Court, he cannot
now be heard that his retirement at the age of SS years should be
construed as compulsory retirement-the superannuatio~ age having R
been increased to 60 years under Junagadh Rules, that the retirement
of the appellant is normal one; he was entitled to pension under Rul•
241 of the Junagadh Rules and the State has passed the impugned order
after complying with the provisions of Rules & affording him an oppor-
tunity to show cause why his pension or gratuity be not reduced.
c
Dismissing the appeal, this Court,

HELD: Rules 188 and 189 have expressly preserved the State
Government's power to reduce or withhold pension by taking
proceedings against a Government Servant even after his retire~
D
ment. l229H; 230A]

In the instant case, in accordance with the procedure specified in
Note I to Rule 33 of the Bombay Civil Services Conduct, Discipline and
Appeal .Rules a show cause notice had been issued to the appellant on
I 7. 7. 71 calling upon him to show fause within 30 days from the date of E
the receipt of the notice as to why the proposed reduction should not be
made in the Pension and death-cum-retirement gratuity. The appellant
failed to avail that opportunity to disprove the allegations and satisfy
his appointing authority that he rendered satisfactory service through-
) out. It was in those circumstances the appointing authority thought fit
to impose reduction on the Pension and gratuity in accordance with f.
Rules 188 and 189 of the Bombay Rules on the ground that the appellant
had not rendered satisfactory service. The appellant is not entitled to
take advantage of clause (b)(ii) of the proviso to Rule 189-A since the
proceedings had been instituted long before his retirement. Further as
per clause (a) of the said proviso the proceedings were already instituted
long before his retirement. Further as per clause (a) of the said proviso, G
the proceedings already instituted while the Government servant was in
service could be continued and concluded even after his retirement.
Therefore the order dated IS. I 1.1977 reducing the pension and gratuity
cannot be said to contravene the Bombay Rules. [231A-E]

A combined reading of clauses 3, l3 and IS of Rule 241-A of H
218 SUPREME COURT RErORTS [1989] 3 S.C.R.

A J unagadh Rules shows that clause 3 is an exception to the general scheme
laid down in clauses 13 and JS. [228C]

Bholanath J. Thakar v. State of Saurashtra, AIR 1954 SC 680;
LJalip Singh v. State of Punjab, [1961] 1 SCR 88; Mori Ram Deka etc. v.
General Manager NEF Railways, Maligaon, Pandu etc., [1964] 5 SCR
~
B 683; State of Maharashtra v. M.H. Mazumdar, [1988] 2 SCC 52 and ' '
M. Narasimhachar v. State of Mysore, [1960] 1SCR981, referred to.

~
State of U.P. v. Brahm Datt Sharma, (1987] 2 SCC 179. followed.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3726
of 1984.
c '-...{
From the Judgment and Order dated 8.8.1981 of the Gujarat
High Court in L.P .A. No. 145 of 1978.

B .K. Mehta and M. V. Goswami for the Appellant.
D
G .A. Shah and M.N. Shroff for the Respondent.

The Judgment of the Court was delivered by
-~
RATNAVEL PANDIAN, J. This is an appeal by special leave
E from the judgment of the Gujarat High Court dismissing the appeal
made in Letters Patent Appeal No. 145 of 1978 arising from the order
passed in Special Civil Application No. 268 of 1978 of the said High
Court.

F
As this case has a chequerred history spreading over decades, we
feel that the relevant facts that are necessary for the disposal of this
appeal are to be stated in brief. The appellant was born on 15th
\
January, 1909 and he obtained the Degree of Bachelor of Engineering
(Civil). He joined the service of the erstwhile State of Junagadh in
Saurashtra region on 1st August, 1934. While the appellant was in the
service of Junagadh State, he was governed by the Junagadh State
G Pension & Parwashi Allowances Rules of 1932 (hereinafter called as
"Junagadh Rules) which had been published in the official Gazette of
that State and which were subsequently codified and published in the
-+
Jugagadh State Account Code. Rule 241-A of the aforesaid Junagadh
Rules provided for pension and Parwashi Allowances. The State of
Junagadh was integrated into the State of Saurashtra on 20th January,
H 1949. Thereafter the appellant was absorbed in the service of the State
TAKHATRY SHIVADATTRAYv. STATE OF GUJARAT [PANDIAN, J.J 219

of Saurashtra. The supplementary Covenant which brought about the A
integration read with Art. 16 of the main Covenant expressly pro-
tected the conditions of the service of the absorbed servants and the
protection was also statutorily recognised by the Saurashtra Ordinance
3 of the 1949 read with Ordinance 1of1948. A proclamation providing
~ a guarantee that the conditions of service could not be varied to the
~

- disadvantage of the Covenanting State servants was also issued in that
behalf on 20th January 1949 which was the date of the merger of the
State into the State of Saurashtra.
B

,_.
~ Based on the decision of this Court in Bholanath J. Thakar v.
State of Saurashtra, A.LR. 1954 S.C. 680 wherein it was held that the
rules as regards the age of superannuation which prevailed in the
'r covenanting State which in that case was the State of Wadhwan, con-
c
tinued to cover those Government servants who had come from that
State and had been absorbed in the services of the State of Saurashtra.
The State of Saurashtra made the Saurashtra Covenanting State
Servants (Superannuation Age) Rules 1955 (hereinafter called as
"Saurashtra Rules") in exercise of the powers conferred by Art. 309 of D
the Constitution of India. Rule 3(i) provided:

"A Govt. servant shall, unless for special reasons other-
wise directed by Government retire from service on his
completing 55 years of age."
E
After the integration of the Saurashtra State into the State of
Bombay a resolution was passed by the Government on 7th January
1957 applying the old Bombay Civil Service Rules to Saurashtra area.
) On 1st July 1959 the Bombay Civil Services Rules 1959, (hereinafter
1._called the "Bombay Rules") were promulgated under Art. 309 of the
Constitution. Clause (c)(2)(ii)(l) of Rule 161 is as follows: F

"Except as otherwise provided in this Sub-clause, Govern-
ment servants in the Bombay Service of Engineers, Class I,
must retire on teaching the age of 55 years, and may be
required by the Government to retire on reaching the age
of 50 years, if they have attained to the rank of Superin- G
tending Engineer."

The appellant was compulsorily retired from service under the above
rule by an order passed by the State of Gujarat on 12.10.1961 with
effect from 12.1.1962 when he had completed the age of 53 years. This
order of retirement was unsuccessfully challenged by the- appellant H
220 SUPREME COURT REPORTS [1989] 3 S.C.R.

A before the Gujarat High Court by a writ petition under Art. 226 of the· ·y·
Constitution. Not being satisfied, the appellant took up the matter
before this Court which by its judgment dated 9.4.1"69 allo..:ed •.he
appeal and declared "that the appellant was entitle~ to •~i.ia::: .n
service until he attained the age of 55 years and that the impugned
order directing his retirement was invalid and ineffective." This judg-
B rient is reported in 1970 1 SCR 244-AIR 1970 S.C. 143, Takhatray
Shivdatray Mankad v. State of Gujarat,. As per this decision, the
appellant had the right to continue in service till he attained the age of
55 years. It may be noted that the appellant had already completed the
age of 55 years by the time the judgment was pronounced by the
Supreme Court. In due compliance of the above judgment <if this
C court, the Government of Gujarat by its order dated 4.8.1969 intima-
ted the appellant that he should be deemed to have remained in service
upto the date on which he attained the age of 55 years, that its upto
1... 1.1964: In other words, by this order the appellant was retired on ~
his attaini'ng the age of 55 years on 14.1.1964. Prior to this.decision of
the Supreme Court, the age of superannuation for Government
D servants of the Government of Gujarat was raised to 58 years with
reservation of power to the State Government to compulsorily retire a
Government servant at 55 years by serving a notice. The appellant in
order to avail of this benefit of the changed circumstances filed a
Special Civil Application No. 70 of 1970 before the High Court of
G.u jarat, but became unsuccessful. Being dissatisfied with that judg- y
E ment of the High Court, he filed a Special Leave Petition No. 977 of
1975 before.this court which by its order dated 21.7.1975 declined to
interfere with the decision of the High Court under Art. 136 of the
Constitution of India. The resultant effect is that the matter came to a
finality to the effect that the appellant was not entitled to continue in
service beyond the age of 55 years. ___,,._
F "~.
·Even before he was compulsorily retired by the Government's
.. Order dated 12.10.1961, a departmental enquiry on the ground of
slackness of supervision had been initiated on 6.2.1961. Thereafter, a
second departmental enquiry was 6rdered against the appellant on
charges of over-payment to contractors and cons~quent loss to the
G Government on 11.4.1963. A third enquiry was ordered against him on
17.8.1963 on charges of payment in advance before the receipt of
goods. Thus there were three departmental enquiries before his retire-
ment on attaining the age of 55 years, that is on 14.1.1964. These ~.
enquiries were pending against the appellant till 1971.

H Be that as it may, the appellant filed a Special Civil Application
TAKHATRY SHIVADATTRAYv. STAIB OF GUJARAT (PANIJJAN, i.j 211

No. 504 of 1971 before the High Court of Gujarat seeking Issue of a A
writ of mandamus against the State of Gujarat to direct the State to
pay the appellant all the outstanding salaty; allowances as well as tile
reviseG. pay and allowances including increment subsequeni to thii
stage of efficiency bar falling due from 12, 1.1962 to 14, 1.1964 together
with interest @ 6% per annum from-the date of payment withheid tili
the date of actual payment thereof to him. The State defended this
action of withholding the pension on the ground that the departmental
enquiries initiated against him were pending. The appellant, there"
fore, filed a Civil Application No. 2304 of 1972 in the above said
Special Civil Application No. 504 of 1971 for interim relief, which
application he withdrew subsequently. According to the appellant, lie
withdrew the application on the representation made on behalf of the {'.
'r respondent therein that the departmental enquiries had become
infructuous consequent upon the retirement of the appellant.

In the meanwhile, the State of Gujarat issued a show cause
notice dated 17. 7.1971 to the appellant informing him that the
Government had considered that bis service had not been fourtd f;)
thoroughly satisfactory on account of the reasons me·ntiotted In the
said show cause notice, and therefore, the Goverllmellt had proposed
to make reduct.ion of 50 per cent both in the amount of j:lcmsion and
death-cum-retirement gratuity admissible to him. We shail now repm:
> duce the relevant portion of the show cause notice {Ailil<ii<ilte 'C'):

"Government therefore proposes; in exetGise of the pow~
ers vested in it under: (i) Para 141{E)(3) and (3) of the
Junagadh Account Code or {Ii) Rufo 16 of the Ex-Sautasft,
Ira Pension Rules, as contained iii Saurashtra G<JVefatttetit
) Resolution, Finance Department No, iil/40 dtrted
19.10.1949 or {iii) Rule 188 of Bombay CM! St:tt'kes f
Rules, as may be applicable to you; to make a tedustiffii of
50% (fifty per cent) both in the amouttt of pension and
Death-cum-Retirement Gratuity admissillle to y<m/;

The appellant submitted bis reply and ihe proceedings went "ti
before the Government for a considerable iengtb of time, Viiimately,. (j
~-· the final order was passed on 15.11.1977 redueing the pension and
gratuity by 50 per cent. Being aggrieved by the said otdet; the avriei'
!ant filed Special Civil Application No. 268 of 1978 before the High
Court of Gujarat for quashing the otdet reducing his pension llttd
gratuity. The learned single Judge of Gujarat High Court rejected the
said civil application in limine by his ordet dated 8,j.1918 Gdticluditig H
222 SUPREME COURT REPORTS [1989] 3 S.C.R.
).- .
A "In the present case the Government recorded reasons why it came to ,
the conclusion that the petitioner's service were unsatisfactory and,
therefore, put a proportionate cut on the petitioner's right to pension.
No case of discrimination is made out."

As against this order, the appellant filed the Letters Patent
B Appeal No. 145 of 1978 before a Division Bench of the High Court ~·
contending that h~ was governed by the Junagadh Rules and he con-
tinued to be governed by those rules in spite of the fact that the
Bombay Rules were sought to be made applicable to him. In t,lie
alternative it was submitted that even if the Bombay Rules were to be :....,_ __
made applicable, so far as the question of payment was concerned,
inasmuch as they were not less advantageous on compulsory retire-
-
'

c ment, proportionate pension was payable to the appellant under the "'"{
Bombay Rules of 1959. The Division Bench examined both the
alternative contentions with reference to the concerned rules and ulti-
mately conducted thus:

D "Under either set of rules, therefore, it was open to the
State Government to reduce the amount of pension pay-
able to the petitioner since his service had not been found
satisfactory by the State Government under the Junagadh
State Rules or, in the alternative, under the Bombay Civil
Services Rules, his service has not been found thoroughly .-l.
E satisfacfory. In view of these conclusions, we agree with the
conclusion reached by A.D. Desai, J. though he did not
examine the alternative case from the point of view of the >
Bombay Civil Services Rules."

On the basis of the above findings, the appeal was dismissed.
Hence the present appeal. ~
F

Shri B .K. Mehta, learned counsel appearing on behalf of the
appellant assailed the impugned judgment of the Division Bench of the
High Court inter-alia contending ( 1) that the High Court had clearly
gone wrong in upholding the impugned order of reduction in pension
G made in the purported exercise of power under Rules 188 and 189 of
the Bombay Rules in view of the finding of this Court in C.A. No. 409
of 1966, Takhatray Shivdatray Mankad's, case (supra), wherein it was
held that the Bombay Rules could not be made applicable to the
appellant; (2) that the appellant is not governed by the Saurashtra
Rules because the said rules do not provide for compulsory retirement
H as pointed out by the Supreme Court in C.A. No. 409 of 1966 and (3)
'
TAKHATRY SHIVADATTRAY v. STATE OF GUJARAT {PANDIAN,J.l 223
'· --{
that the Stae Government has not specifically stated in the show cause
A
notice dated 17. 7 .1971 (Annexure C) as well as in the impugned order
for reducing the pension (Annexure A) as to under what set of rules,
namely, whether under the J unagadh Rules or the Saurashtra Rules or
-, the Bombay Rules they were exercising the power for reducing the
pension and gratuity.
. "" It has been further urged that clauses 3, 13 and 15 of Rule 241-A
B

of Junagadh Rules operate in different fields in that while Rule 3
applies to cases of normal superannuation, Rule 13 applies to cases of
~
compulsory retirement and, therefore, the observation of the Division
A Bench of the High Court in the Letters Patent Appeal approving the
view taken by the learned single judge that Rule 3 controls Rule 13,
.,,,, would practically render Rule 13 as ultra vires Art. 311 of the Constitu·
c
lion of India, since compulsory retirement together with reduction of
pension would amount to penalty in the absence of procedural safe·
guards. Further it is urged that during the pendency of the appeal
(C.A. No. 409/66) before this court, the Bombay Rules were extended
to the Saurashtra State Covenanting servants and the superannuation D
age was raised to 58 years and therefore the appellant in any case was
entitled to continue upto 60 years of age under the Junagadh Rules or
upto 58 years of age under the Bombay Rules. When it was so, the
.->· retirement of the appellant on attaining the age of 55 years should be
construed as a case of compulsory retirement before the normal age of
superannuation which coupled with the order of reduction in pension E
would amount to penalty which could not have been imposed without
..... following the prescribed procedure under the Conduct, Discipline and
Appeal Rules. In support of this last submission, reliance was placed
on the decision of this Court in Dalip Singh v. State of Punjab, I1961] I
) SCR 88 and Moti Ram Deka Etc. v. General Manager, N.E.F. Rail·
ways, Maligaon, Pandu, Etc., [1964] 5 SCR683. F

In the alternative, he submitted assuming that the Bombay Rules
apply to the case of the appellant, the enquiry as prescribed under
Rule 189 of the Bombay Rules was not followed. further if the case of
th.e appellant is to be governed by the Saurashtra Rules, there was no
provision for compulsory retirement as pointed out by the Supreme G
Court in C.A. No. 409 of 1966. Finally he submitted that the impugned
t order for reduction of pension is bad in law and void because ( 1) no
enquiry for the reasons as contemplated under Rule 189 of the
Bombay Rules had been conducted and (2) admittedly the State had
stated before the High Court in the course of hearing of the Civil
Application on 24.10.1972 that the departmental enquiry had become H
224 SUPREME COURT REPORTS [1989] 3 S.C.R.

A infructuous and was dropped as the appellant had already retired. In
any case, no enquiry could be held in pursuance to the show cause
notice dated 17. 7 .1971 after a lapse of 4 years in view of the prohibi-
tion under proviso (b )(ii) of Rule 189-A of the Bombay Rules. There-
fore, the reduction of pension and gratuity by 50% is wholly unreason-
able, unwarranted and arbitrary.
B
Mr. C.A. Shah, learned counsel appearing on behalf of the
respondent, stoutly opposed the submissions made on behalf of the
appellant stating that the appellant was directed to retire on attaining
the age of 55 years as per the judicial pronouncement of this court in
C.A. No. 409/66 fixing his age of retirement at 55 years and hence the
appellant cannot be permitted to be heard that his retirement at the
c age of 55 should be construed as compulsory retirement, in view of the
fact that the age of retirement was increased to 60 years under the
Junagadh Rules and 58 years under the Bombay Rules. According to
Mr. Shah after the dismissal of the Special Civil Application No. 70 of
1970 by the Gujarat High Court holding that the right of the appellant
I) to continue in service was judicially determined by this court and so it
cannot be said that the State Government had discriminated the appel-
lant, which decision of the High Court was upheld by this court by the
order of dismissal of the Special Leave Petition on 21. 1.1979. It is
urged by the learned counsel for the respondent that the appellant's
retirement having been a normal one, he was entitled to pension under
E Rule 241-A of the Junagadh Rules and as such the State Government
in exercise of the powers under the said rules had passed the order
dated 15. 11.1977 reducing the pension and gratuity to 50% after
affording an opportunity to him by issuing a show cause notice alleging
several acts of misconduct to which notice the appellant did not give
any explanation in spite of several opportunities afforded for over 6
F years. Hence the order of the Government reducing the pension and
gratuity to 50% on the finding that the allegations of misconduct are
proved is justified. According to him Rules 188 and 189 of the Bombay
Rules are inapplicable to the case of the appellant. Moreover, these
rules are in pari materia to Rule 241-A of the Junagadh Rules and
therefore as held by the Division Bench of the High Court under either
G of the Rules, the Government is competent to reduce the pension for
misconduct. Coming to Rule 189-A which was introduced on
29.10.1971 after the issue of show cause notice in this case; it is said t
that this Rule provides that the proceedings already initiated shall be
deemed to be a proceeding under this rule and continued and
concluded by the authority. In the present case, the proceedings were
H initiated even while the appellant was in service and they were
...... TAKHATRY SHIVADATTRAY v. STATE OF GUJARAT IPANDIAN, J.] 225

dropped after his retirement. Therefore, the appellant is not Justified
A
in contending that those proceedings relate to misconduct which had
occurred 4 years prior to the institution and therefore they are not
sustainable as per proviso (b )(ii) of Sec. 189-A of the Bombay Rules.

'-y( We shall scrutinize the respective contentions of the learned
counsel with reference to the facts of this case and the position of law B
with reference to the relevant rules and the various judicial pronoun-
cements of this court in a series .of decisions <;lealing with powers vested
in the appointing authority to reduce the pension and gratuity on proof
-.A of allegations of misconduct or negligence committed by the employee
or on the proof of inefficiency and unsatisfactory service. The appellant
y who was retired compulsory on 12.1.1962 in pursuance of the order of
the Public Works Department, State of Gujarat dated 12'.10.1961 c
under the Bombay Rules when he had completed the age of 53 years,
successfully contested that matter and obtained the order in his favour
from this court in C.A. No. 409 of 1966 by the judgment dated 9.4.69
quashing the order of compulsory retirement and declaring "that the
appellant was entitled to remain in service until he attained the age of D
55 years"

_)... ment In pursuance of the above judgment of this court, the Govern-
passed the following order on 4.8.1969, the relevant portion of
which reads as under:
E
"Shri T.S. Mankad should be deemed to have remained in
service as Executive J;ngineer upto the date on which he
had attained the age of 55 years i.e. upto 14.1.64 (A.N.)

f The orders issued in G,overnment Order, Public Works
Department No. DPA 1861'E dated 12. 10.61 should be F
treated to have been cancelled."

The aforesaid order was challenged by the appellant in Special Civil
Application No. 70 of 1970 before the Gujarat High Court with a
prayer to declare this order dated 4.8.1969 as illegal, void, ultra vires,
bad in law and inoperative and the same was not binding on the G
+·appellant, besides challenging the constitutional validity of the latter
' part of the amended Rules 161(ii)(l) of the Bombay Rules. But this
Special Civil Application No. 70 of 1970 was rejected holding that the
right of the appellant to continue in service was judicial!y determined
by this court and that judicial determination was given effect to by the
State Government by its order dated ·4.8.i969. As against this judg- H;
226 SUPREME COURT REPORTS [1989] 3 S.C.R.
'r
I
A ment, the appellant preferred Special Leave Petition before this court
which was dismissed on 21.1.1979. Thus the controversy was put to an
end and the result was that the appellant was not entitled to continue
in service beyond 55 years of age. Hence the contention of the learned
counsel for the appellant that the appellant is entitled to avail the
benefit of the increase of age of superannuation fixing it at 60 years
B under the Junagadh Rules or at 58 years under the Bombay Rules
cannot be accepted. The further submission made on behalf of the
appellant that his retirement should be construed only as compulsory
retirement coupled with the order of reduction in pension and gratuity
amounting to penalty without following the procedures prescribed
under the Conduct, Discipline and Appeal Rules, is also equally to be
C dismissed as devoid of any ·merit since the appellant was retired only in
accordance with the pronouncement of this court.

We have now to examine whether the propositions of law
expatiated in the decisions cited by Mr. B.K. Mehta can be made
applicable to the facts of this instant case. In Dalip Singh v. State of
D Punjab, [1961] 1 SCR 88 the appellant therein namely, Dalip Singh
was retired from service for 'administrative reasons'. He brought a suit
on a p"lea that the order of his retirement amounted to removal from
service within the meaning of Art. 311(2) of the Constitution. The
Trial Court decreed the suit in his favour. On appeal by the State, the ~
High Court dismissed the suit holding that the order of compulsory
E retirement in that case did not amount to removal from service within
the meaning of Art. 311 of the Constitution. As against this, Dalip
Singh approached this court. This Court ·held that there were no basis
for saying that the order of retire.hen! contained any imputation or
charge against the officer and that he had been allowed full pension as
provided in Rule 278 of the Patiala State Regulations, on the strength ~-
F of which Dalip Singh was retired and that the order of retirement was
hardly by way of punishment. In that view, this court agreed with the
view taken by the High Court and dismissed the appeal.

In Moti Ram Deka Etc.Iv. General Manager, N.E.F. Railways,
Maligaon, Pandu, Etc., [1964] 5 SCR 683 the only question for con-
G sideration was whether the termination of services of a permanent
Railway servant (Civil) under Rule 148(3) and 149(3) of the Indian -+
Railway Establishment Code amounted to removal under Art. 311(2)
of the Constitution of India. Majority of the seven judges Bench hav-
ing regard to the facts therein held that the termination of services of a
permanent servant otherwise than on ground of superannuation or
H compulsory retirement, must per se amount to his removal and if by
TAKHATRY SHIVADATTRAYv. STATE OF GUJARAT [PANDIAN, J.] 227
--...,
Rule 148(3) or Rule 149(3), such a termination is brought about, the
A
Rule clearly contravenes Art. 311(2) and so it must be held to be
invalid. On carefully going through both the decisions, we are of the
firm view that these two decisions cannot be of any assistance to the
case of the appellant since in the present case, the appellant's retire-
··.>{ ment on attaining the age of 55 years, pursuant to the declaration of
this Court was a nounal retirement on reaching the age of superannua- B
tion and not a compulsory retirement by way of punishment for mis-
conduct as contended by the appellant.
·- A Next we shall deal with the respective contentions of both the
parties with reference to the Junagadh Rules and the Bombay Rules. It
y may be mentioned here that the appellant himself under the ground
(h) of his Special Leave Petition had stated that his services were to be
c
governed by the Junagadh Rules. It was also urged on behalf of the
respondent that the appellant's retirement being a normal one, he
is entitled to pension under Junagadh Rules and the State Government
in exercise of the power vested in it had passed the order dated
15. 11. 1977 reducing the pension and gratuity to 50%. As pointed out D
by the Division Bench of the High Court, under the scheme of the.
Junagadh Rules as per clause 10 of Rule 241-A, the pensions are
admissible for superior service of not less than 10 years and they are
,). .. divided into 4 classes, namely, (1) compensation pension; (2) invalid
pension; (3) superannuation pension; and (4) retiring pension. As we

.. are. concerned only with the superannuation pension in the present
case, we would refer to the relevant clause.which reads as follows:
E

"(13) Superannuation pension is admissible only on attain-
ing the age of 60 years, except in cases in which the
authorities consider it desirable in the interest of the State
an officer should retire on attaining the age of 55 years or F
at an}i time thereafter on such superannuation pension as he
may have earned at the time of retirement."

A bare perusal of the above clause shows that superannuation
pension is admissible to the State Goyernment servant on his attaining
the age of 60 years, save in cases in which the authorities consider in G
-+ the interest of the State to retire an officer on attaining the age of 55
years or at any time thereafter on such superannuation pension as he
may have earned at the time of his retirement.

Clause 15 of Rule 24·1-A deals with the proportionate pension.
As clasue 3 of Rule 241-A is material for our purpose, that clause is H
reproduced hereunder:
228 SUPREME COURT REPORTS [1989] 3 S.C.R.

"The full amount of pension or gratuity admissible under
A the rules will not be granted unless the service is proved
from State records on receipt of an application for pension
or gratuity from the retired officer in Form No. 53 and will
be liable to reduction in the absence of such proof or if the
service is not reported by the Head of the Department to
B have been satisfactory."

As per this clause, the Government servant will be entitled to full
amount of pension or gratuity only if his service is proved from the
records satisfactory ll(st the pension will be liable to reduction. A
combined reading of clauses 3, 13 and 15 shows that clause 3 is an
exception to the general scheme laid down in clauses 13 and 15. On
c careful consideration of this rule, we see no merit in the submissions
made by the learned counsel that these clauses operate in different
fields and therefore observations of the High Court that Rule 3
controls Rule 13 would render Rule 13 as ultra vires Art. 311 of the
Constitution of India, since compulsory retirement together with
D reduction of pension would amount to penalty in the absence of the
procedural safeguards. The Government in its detailed orde.r dated
15 .11.1977 has set out the reasons for reducing the amount of pension
and gratuity. The relevant portion of the order reads thus:

"Government is satisfied that the services of Shri T.S.
E Mankad, Executive Engineer have not been found to be
thoroughly satisfactory. Accordingly Government hereby
orders that the pension and Death-cum-Retirement
Gratuity, which may be accepted by the Accountant
General, Ahmedabad as admissible under the rules shall be
reduced by the specified extents as under:
F
(i) Amount of reduction in pension = 50%
(Fifty percent)

(ii) Amount of reduction in gratuity = 50%
(Fifty percent)."
G
According to the respondent, the appellant instead of giving a proper
explanation to the show cause notice dated 17 .7.1971 entered into long
+
correspondence with respondent raising all sorts of irrelevant
questions and seeking several adjournments thereby adopting delayed
tactics and further the appellant though informed the authorities that
H he would inspect certain documents in the Department for making his
TAKHATRYSHIVADATIRAYv. STATE OF GUJARAT (PANDIAN,J.] 229
._, reply, he would not do so and therefore according to the learned A
counsel it was in those circumstances, the Government was cons-
trained to pass this order dated 15 .11.1977 after a lapse of more than 6
years taking into consideration that his service had not been found
thoroughly satisfactory· for the reasons mentioned in the show cause
notice to which he had not given any reply. We see much force in the
above submission, made by Mr. Shah the learned counsel appearing B
for the respondent. ·

In view of the above position, we are of the view that the
impugned order dated 15.11.1977 cannot' be said to contravene the
Junagadh Rules.

Now we shall pass on to the alternative contention on the c
y
assumption that Bombay Rules would apply to the case of the appel-
lant. The relevant Rules are Rules 188 and 189 which are reproduced
below:

"188. Government may make such reduction as it may D
think fit -ill the amount of the pension of a Government
servant whose service has not been thoroughly satisfac-
tory."

"189. Good conduct is an implied condition of every
grant'of pension. Government may withhold or withdraw a E
pension or any part of it if the pensioner be convicted of
serious crime or be found to have been guilty of grave
misconduct either during or after the completion of his
se..Vice, provided that before any order to this effect is
issued, the procedure referred to in Note 1 to Rule 33 of
the Bombay Civil Services Conduct, Discipline and Appeal F
Rules shall be followed."

An examination of Rule 188 shows that the Government may
reduce the amount of pension of a Government servant as it may think
fit if the service of the Government servant has not been thoroughly
satisfactory. As per Rule 189 the Government may withhold or with- G
draw a pension or part of it if the petitioner is convicted of severe
crime or found to have been guilty of misconduct during or after the
completion of service provided that before any order to this effect is
issued, the procedure referred to the Bombay Civil Services Conduct,
Discipline and Appeal Rules are followed. The8e Rules thus, have expre-
ssly preserved the State Government's power to reduce or withhold pen- H
230 SUPREME COURT REPORTS [1989] 3 S.C.R.

sion by taking proceedings against a Government servant even after ')'
A
his retirement. The validity of these rules have not been challenged.
These two rules came for interpretation before this court in State of
Maharashtra v. M.H. Mazumdar, [1988] 2 SCC 52 and this Court
expressed its view with reference to these rules as follows:

B "The aforesaid two rules empower Government to reduce .t'
or withdraw a pension. Rule 189 contemplates withholding
or withdrawing of a pension or any part of it if the
pensioner is found guilty of grave misconduct while he was
in service or after the completion of his service. Grant of ~

pension and its continuance to a Government servant )k
depend upon the good conduct of the Government servant.
c Rendering satisfactory service maintaining good conduct is
a necessary condition for the grant and continuance of pen-
sion. Rule 189 expressly confers power on the Government
to withhold or withdraw any part of the pension payable to
a Government servant for misconduct which he may have
D committed while in service. This rule further provides that
before any order reducing or withdrawing any part of the
pension is made by the competent authority the pensioner
mnst be given opportunity of defence in accordance with
the procedure specified in Note I to Rule 33 of the Bombay
Civil Services Conduct, Discipline and Appeal Rules. The
E 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 aforesaid
rules. The validity of the rules was not challenged either
before the High Court or before this Court. In this view,
the Government has power to reduce the amount of pen-
F sion payable to the respondent. In M. Narasimhachar v. ;...
State of Mysore, [1960] 1 SCR 981: AIR 1960 SC 247 and
State of Uttar Pradesh v. Brahm Datt Sharma, [1987) 2 SCC
179 similar rules authorising the Government to withhold
or reduce the pension granted to Government servant were
interpreted and this Court held that merely because a
G Government servant retired from service on attaining the
age of superannuation he could not escape the liability for
misconduct and negligence or financial irregularities which
he may have committed during the period of his service and
+
the Government was entitled to withhold or reduce the
pension granted to a Government servant."
H
TAKHATRYSHIVADATIRAYv. STATE OF GUJARAT [PANDIAN, J.] 231

•. "( In compliance with the principle of natural justice requiring an
A
opportunity of hearing to be afforded to a Government servant before
an order affecting his right is passed and in accordance with the pro-
cedure specified in Note-I to Rule 33 of the Bombay Civil Services
Conduct, Discipline and Appeal Rules a show cause notice as pointed
out earlier had been issued to the appellant on 17.7.1971 calling upon
him to show cause within 30 days from the date of the receipt of the B
notice as to why the proposed reduction should not be made in the
pension and death-cum-retirement gratuity. But the appellant failed tn
avail that opportunity lo disprove the allegations and satisfy his
appointing authority that he rendered satisfactory service throughout.
~.' It was in those circumstances the appointing authority taking into con-
sideration of the serious allegations levelled against him in the discip-
linary proceedings had thought. it fit to impose reduction in the pension c
and gratuity in accordance with Rules 188 and 189 of the Bombay
Rules on the ground that the appellant had not rendered satisfactory
service. The appellant is not entitled to take advantage of clause (b )(ii)
of the proviso to Section 189-A of the Bombay Rules since the pro-
ceedings had been instituted long before his retirement. Further as per D
clause (a) of the said proviso, the proceedings already instituted while
the Government servant was in service could be continued and con-
cluded even after his retirement. Hence for the reasons stated above
the impugned order dated 15.11.1977 reducing the pension and
gratuity cannot be said to contravene the Bombay Rules.
E
At the risk of repetition, we may point out that three depart-
... mental proceedings containing serious allegations of misconduct were
instituted against the appellant of which one was instituted even before
he was compulsorily retired on 12. I. 1961 and other two proceedings
were instituted in the year 1963 that is much earlier the appellant
attaining the age of superannuation on 14.1.1964. These departmental F
proceedings are stated to have become infructuous consequent upon
the retirement of the appellant on attaining the age of superannuation.
To the show cause notice dated 17. 7.1971 proposing to inflict reduc-
tion in pension and gratuity the appellant, instead of giving a proper
reply, disproving the charges and satisfying the appointing authority
that he rendered satisfactory service throughout had delayed the mat- G
ter for over a period of six years. It was in that situation that the
impugned order dated 15.11.1977 happened to be passed.

The learned counsel for the appellant strenuously contended that
after the disciplinary inquiries had been dropped on the ground that
they had become infructuous, the Government was not right and H
232 SUPREME COURT REPORTS [1989] 3 S.C.R.

justified in reducing the pension and gratuity on the same charges )--·
A '
which were the subject matter of the enquiries. This argument of the
learned counsel, in our opinion, does not merit consideration because
the charges against the appellant were not made use of for awarding
any punishment after his retirement from service but only for deter-
mining the quantum of the appellant's pension in accordance with the
B rules relating to the payment of pension and gratuity. In this connec-
tion it would be apposite to refer the observation of the Supreme ¥
•Court in State of Uttar Pradesh v. Brahm Datt Sharma & Anr., [1987] 2
sec 179 which we quote _below:
"If disciplinary proceedings against an employee of the '-,.
Government are initiated in respect of misconduct commit-
c ted by him and if he retires from service on attaining the
''(
age of superannuation, before the completion of the
proceedings, it is open to the State Government_ to direct
deduction in his pension on the proof of the allegations
made against him. If the charges are not established during
D the disciplinary proceedings or if the disciplinary proceed-
ings are quashed it is not permissible to the State Govern-
ment to direct reduction in the pension on the same allega-
tions but if the disciplinary proceedings could not\pe
completed and if the charges of serious allegations ai'e
established, which may have bearing on the question of ~-
rendering efficient and satisfactory service, it would be
open to the Government to take proceedings against the
Government servant in accordance with rules for the
deduction of pension and gratuity."

The above principle laid down in that case squarely applies to the facts
-
F' of the present case. A
For all the reasons hereinbefore stated we hold that the order of
State Government dated 15-11-1977 reducing the amount of pension
and the gratuity on the ground that the service of the appellant had not
been found thoroughly satisfactory by the appointing authoriy cannot
G be assailed. In that view of the matter we see no reason to interfere
with the impugned judgment of the High Court. In the result, the
appeal is dismissed but without any order as to costs. -+
Y.L. Appeal dismissed.