Case Note & Summary
The appeal arose from a Central Administrative Tribunal, Cuttack Bench order directing the State of Orissa and other appellants to release final pension and gratuity to a retired Indian Police Service officer, the respondent, within ninety days. The respondent retired on December 31, 1990. About six months before retirement, a raid was conducted on his residential premises, leading to a prosecution in the Special Court, Cuttack under Section 13(2) read with Section 13(1) of the Prevention of Corruption Act for possessing assets disproportionate to known sources of income. The criminal case remained pending. The appellants withheld gratuity and did not sanction final pension, but granted provisional pension at 90% of entitlement. The respondent approached the Tribunal seeking release of gratuity and final pension. The appellants relied on Rule 6 of the All India Services (Death-cum-Retirement Benefits) Rules, 1958, contending that the pending judicial proceeding justified withholding gratuity and non-final pension. The Tribunal held that Rule 6(1) did not apply because the charge against the respondent was not one of causing pecuniary loss to the Central or State Government by misconduct or negligence. The Supreme Court disagreed, holding that the Tribunal's reading was unsustainable. The Court analyzed Rule 6, noting that sub-rule (1) contains two distinct grounds: (a) being found guilty of grave misconduct in a departmental or judicial proceeding, or (b) being found to have caused pecuniary loss to the government by misconduct or negligence during service. Sub-rule (2) provides that during the pendency of any departmental or judicial proceeding instituted under sub-rule (1), the government shall sanction provisional pension but shall not pay gratuity or death-cum-retirement gratuity until conclusion of proceedings and final orders. Thus, a pending judicial proceeding for grave misconduct alone is sufficient to withhold gratuity and final pension; it is not necessary that the proceeding relate to pecuniary loss. The Court further observed that the expression 'misconduct' is not defined in the All India Services (Death-cum-Retirement Benefits) Rules, the Pensions Act, General Clauses Act, or the Leave Rules, making it reasonable to adopt the definition from the Prevention of Corruption Act. Possession of assets disproportionate to known sources of income amounts to grave misconduct under that Act. Consequently, the Tribunal erred in holding that unless the charge expressly includes causing pecuniary loss, action under Rule 6(2) cannot be taken. The Supreme Court allowed the appeal, set aside the Tribunal's judgment, and made no order as to costs.
Headnote
A) Service Law - Pension and Gratuity - Withholding During Pendency of Judicial Proceeding - Rule 6 of All India Services (Death-cum-Retirement Benefits) Rules, 1958 - A retired Indian Police Service officer faced pending prosecution under Section 13(2) read with Section 13(1) of Prevention of Corruption Act for possessing assets disproportionate to known sources of income. The State withheld gratuity and did not sanction final pension, sanctioning only provisional pension at 90%. The Tribunal held Rule 6(1) inapplicable because charge was not of causing pecuniary loss. The Supreme Court held that Rule 6(1) provides two independent grounds: guilt of grave misconduct or causing pecuniary loss; and under Rule 6(2), during pendency of judicial proceeding for grave misconduct, the government may withhold gratuity and death-cum-retirement gratuity and sanction provisional pension. Held that judicial proceeding need not relate to charge of causing pecuniary loss to government. (Pages 1-4) B) Statutory Interpretation - Definition of 'Misconduct' - Borrowing Definition from Prevention of Corruption Act - Rule 6, All India Services (Death-cum-Retirement Benefits) Rules, 1958 and Prevention of Corruption Act - Since AIS (Death-cum-Retirement Benefits) Rules, Pensions Act, General Clauses Act, and Leave Rules do not define 'misconduct', it is reasonable and permissible to adopt the definition in Prevention of Corruption Act. Held that possession of assets disproportionate to known sources of income constitutes grave misconduct within Rule 6, justifying withholding of gratuity and final pension pending trial. (Pages 1-4)
Issue of Consideration
Whether Rule 6(1) of the All India Services (Death-cum-Retirement Benefits) Rules, 1958 requires a charge of causing pecuniary loss to the government for withholding gratuity and final pension, or whether a pending judicial proceeding for grave misconduct suffices; and whether 'misconduct' under the rule can be interpreted with reference to the Prevention of Corruption Act.
Final Decision
Appeal allowed; judgment of Central Administrative Tribunal set aside; no order as to costs.
Law Points
- Rule 6 of All India Services (Death-cum-Retirement Benefits) Rules
- 1958 provides two independent grounds for withholding pension/gratuity: guilty of grave misconduct or causing pecuniary loss to government by misconduct or negligence
- during pendency of judicial proceeding for grave misconduct
- government may withhold gratuity and sanction only provisional pension
- expression 'misconduct' not defined in service rules may be understood as defined in Prevention of Corruption Act
- possession of assets disproportionate to known sources of income constitutes grave misconduct under Section 13(1)(e) Prevention of Corruption Act.
