State of Jharkhand and Others v. Jitendra Kumar Srivastava and Another
"Pension and gratuity are hard-earned benefits in the nature of property protected by Article 300A, so the State cannot withhold any part of them, or leave encashment, during pending departmental or criminal proceedings without a statutory provision permitting it; executive instructions are not law for this purpose."
Issues Before the Court
- (i)
Whether, without any provision in the pension rules permitting it, the State can withhold part of the pension, the gratuity and the leave encashment of a retired employee while departmental or criminal proceedings against him are pending?
- (ii)
Whether executive instructions are 'law' that can authorise such a deprivation under Article 300A?
Law & Rules Applicable
- (i)
Constitution of India, Article 300A (no person shall be deprived of his property save by authority of law).
- (ii)
Bihar Pension Rules, Rule 43(a) and 43(b) (withholding or withdrawal of pension where, in departmental or judicial proceedings, the pensioner is found guilty of grave misconduct or of causing pecuniary loss).
Application to Facts & Circumstances
The respondent joined the Department of Animal Husbandry and Fisheries in 1966. Two criminal cases were registered against him in 1996 for alleged financial irregularities, and departmental proceedings were started in 2002. When he retired on 31 August 2002, the State of Jharkhand withheld 10% of his pension, his gratuity and his leave encashment, among other dues, pending the outcome of those proceedings. The Jharkhand High Court held that the rules gave the State no power to withhold pension or gratuity while the proceedings were pending, and the State appealed.
The Court held that pension and gratuity are not bounties to be distributed at the employer's will. They are hard-earned benefits that accrue to the employee and are in the nature of property, so under Article 300A a person can be deprived of them only by authority of law.
Executive instructions do not have statutory character and are not 'law' for the purposes of Article 300A. Rule 43(b) of the Bihar Pension Rules permits pension to be withheld or withdrawn only when the pensioner is found guilty in departmental or judicial proceedings; it gives no power to withhold pension while the proceedings are pending. Without a statutory provision, the State could not take away any part of the pension, gratuity or leave encashment.
Conclusion & Ruling
- (i)
The State's appeals were dismissed with costs, and the High Court's direction to release the withheld dues was upheld.
- (ii)
Pension and gratuity are property protected by Article 300A and cannot be withheld, even in part, without the authority of law; executive instructions do not suffice.
- (iii)
A power to withhold pension that depends on a finding of guilt cannot be exercised while the proceedings are still pending.