Tuesday 27 September 2022

Whether Compulsory Retirement Warrants Reduction In Pension/ Gratuity To Be Decided At Time Of Imposing Punishment?

 It is trite law that pension is a legal right available to an

employee on the basis of long years of service rendered by him and the said right can be taken away only after following due procedure. It is pertinent to note that even in a case where an employee is dismissed or removed for misconduct, insolvency or inefficiency, compassionate allowances amounting to 2/3rd of the pension can be granted in special circumstances. Further, Rule 6(c) provides that where a person, who has been granted pension on compassionate retirement dies, and his family is entitled to a family pension under Section 7 of Part III KSR. {Para 10}

11. On a close reading of the provisions of the KSEB Employees

(Classification, Control & Appeal) Regulations, I notice that orders

adverse to the interest of an employee are liable to be passed after

conduct of a due enquiry as provided in the said Regulations. Rule

6(a) of Part III, KSR provides that pension and death-cum-retirement

gratuity admissible to the employee on the date of such retirement is

liable to be granted to an employee by the competent authority

provided that the authority imposing the penalty may order reduction

if the circumstances of any particular case warrant such reduction.

Therefore, the question whether a particular case where compulsory

retirement is imposed warrants reduction in pension or gratuity or both

is to be specifically considered by the authority imposing the

punishment. According to me, it appears that such consideration

whether the penalty should result in any reduction in pension or

DCRG is a decision which has to be taken by the authority at the time of imposition of penalty itself. If not, the entire exercise of

appreciation of the factors which lead to the imposition of the penalty will have to be redone at a later point in time which, according to me, would be impermissible since that would amount to a re-appreciation of the facts involved and therefore to double jeopardy.


 IN THE HIGH COURT OF KERALA AT ERNAKULAM

WP(C) NO. 9290 OF 2021

A.G.DINESH  Vs THE KERALA STATE ELECTRICITY BOARD LIMITED

PRESENT

 MRS. JUSTICE ANU SIVARAMAN

Dated this the 26th day of September, 2022


This writ petition is filed seeking the following prayers:

“i) To issue a writ of certiorari or such other appropriate

writ order or direction calling for the records relating to

Exhibit P9 and quash the same.

i) To direct the respondents to sanction and pay the full

amount of pension to the petitioner from the date of his

retirement on 17.11.2014 and continue to pay the same

every month.

iii) To direct the respondents to forthwith regularize the

suspension period of the petitioner from 21.6.2003 to

7.11.2006 as duty and pay all consequential benefits to him

within a prescribed time limit.

iv) To direct the third respondent to forthwith take a

decision on the arrears of salary and allowances due to the

petitioner as directed in Exhibit P9 order of the second

respondent within a prescribed time limit.”

2. Heard the learned counsel for the petitioner and the learned

standing counsel appearing for the respondents.

3. It is submitted by the learned counsel for the petitioner that the

petitioner, who was working as Senior Superintendent in the Kerala

State Electricity Board, was placed under suspension on 21.06.2006

on allegations with regard to assisting in theft of electricity by

consumer. It is submitted that a memo of charges was issued to him on

02.08.2006 to which the petitioner submitted his reply. Finding the

reply unsatisfactory, a disciplinary enquiry was ordered to be

conducted against the petitioner. The petitioner had been reinstated in

service on 07.11.2006, pending finalization of the disciplinary

proceedings. After conduct of the enquiry, an order was passed on

07.11.2014 imposing the penalty of removal from service on the

petitioner. The petitioner preferred an appeal before the 2nd respondent

as against the order of removal. By Ext.P1 proceedings dated

06.08.2015, the 2nd respondent considered the pathetic condition of the

family of the appellant and, taking a lenient view, decided to modify

the punishment of removal as compulsory retirement with effect from

the date of removal. It is contended that Ext.P2 Non Liability

Certificate was also issued to the petitioner stating that there are no

liabilities to the Board or the Government outstanding from the

petitioner. However, the retirement benefits were not disbursed to the

petitioner. The petitioner submitted Ext.P3 petition before the 2nd

respondent seeking the release of the retirement benefits.

4. It is submitted that on 25.10.2017, Ext.P4 order was passed by

the 2nd respondent contending that Rule 6(a) of Part III, KSR provides

power in the authority which passed the order of punishment to order

a reduction either in pension or DCRG or both. Therefore, the 2nd

respondent, after examining the entire file, decided to reduce 50% of

the eligible pension of the petitioner and settled his pensionary

benefits. It is submitted that the petitioner had submitted

representations against the said order which were rejected by Ext.P6.

The petitioner thereupon approached this Court filing W.P.

(C).No.6725/2020. This Court considered the contentions advanced on

either side and held as follows:

“5. Even when I hear Sri.M.K.Thankappan on the afore lines,

the fact remains that in Ext.P1, the competent Authority -

namely the Chairman and the Managing Director did not

mention anything about the reduction of the pension of the

petitioner but only modified his earlier punishment of removal

from the service as compulsory retirement. Obviously therefore,

when Ext.P1 is silent as regards the pension of the petitioner, it

is seriously doubtful whether Ext.P2 could have been issued by

the same Authority invoking the powers under Rule 6(a) Part III

of the KSR, particularly when the said Rule obligates the

Authority - while imposing the punishment - to deal with the

question of reduction of pension also. The fact that Ext.P1 is

silent is admitted and therefore, the acme question is whether

the Chairman and the Managing Director could have issued

Ext.P2 in such a manner, which, prima facie appears to impose

a double punishment on the petitioner.

6. Even though I have recorded my preliminary observations as

afore, I am of the certain view that the Chairman and the

Managing Director must hear the petitioner also and then take

a fresh decision relating to his pension, since I cannot find

favour with Ext.P2 as it is presently framed.

In the afore circumstances and for the reasons above, I set

aside Ext.P2; and consequentially, direct the Chairman and the

Managing Director to take a fresh decision as regards the

pension of the petitioner, adverting specifically to the

applicable statutory provisions and also after affording an

opportunity of being heard to the petitioner - either physically

or through video conferencing - thus leading to an appropriate

decision thereon, as expeditiously as is possible, but not later

than six weeks from the date of receipt of a copy of this

judgment.”

Thereafter, the petitioner submitted Ext.P8 representation which

was ultimately decided by Ext.P9 order. The 2nd respondent after

considering the contentions of the petitioner found that Rule 6(a) of

Part III, KSR provides power to the authority who imposed the

punishment of compulsory retirement to make orders on whether the

pension or gratuity should be admitted in full or not. It was held that

since the 2nd respondent had imposed the punishment of compulsory

retirement by reducing the punishment of removal already inflicted on

the petitioner, the 2nd respondent was fully competent to pass an order

under Rule 6(a) of Part III, KSR reducing the pension. It was found

that the reduction of pension at the hands of pension sanctioning

authority, which is the Board in the instant case, would be required

only for reduction of pension under Rule 2 or 3 or Rule 59 of Part III,

KSR read with Regulation 12(2) of the KSEB Employees

(Classification, Control & Appeal) Regulations, 1969. It was therefore

found that since Rule 6(a) of Part III, KSR empowered the reduction

of pension by the same authority which imposes the punishment of

compulsory retirement, the orders passed by the 2nd respondent were

fully competent.

5. The learned counsel for the petitioner submits that Rule 6(a)

specifically provides that an employee who has been compulsorily

retired from service would be entitled to pension unless the authority

which imposes the punishment specifically directs the reduction of

pension or DCRG or both if the circumstances of any particular case

warrant such reduction. The specific case of the learned counsel for

the petitioner is that the question whether any reduction in pension or

DCRG is warranted in the particular facts and circumstances of a case

is a question which has to be decided by the competent authority at the

time when the punishment of compulsory retirement is being imposed,

which is the point in time where all the relevant documents and

materials are available with such authority and the petitioner is on

notice with regard to the punishment being imposed.

6. A detailed counter affidavit has been placed on record by the

respondents. It is contended by the respondents that a plain reading of

the Rule does not support the contention that an order of reduction of

pension or gratuity which the competent authority has the power to

order should be passed at the time when the punishment is being

imposed. It is contended that all the contentions of the petitioner have

been specifically adverted to and considered while passing Ext.P9

order. It is submitted that the Rule does not mandate that while issuing

orders of compulsory retirement, the competent authority should

specify therein itself the details of pension or death-cum-retirement

gratuity sought to be reduced under Rule 6(a). It is further contended

that Ext.P9 itself would show the circumstances under which the

orders came to be passed separately. It is submitted that the petitioner

had challenged the order of compulsory retirement imposed on him by

filing W.P.(C).No.26496/2015. It is in the meanwhile that the

petitioner had submitted representations for release of pensionary

benefits. The Chief Engineer (HRM) therefore pointed out that, as

compulsory retirement was awarded as penalty on proved offences,

necessary action has to be taken by the competent authority who

inflicted the punishment of compulsory retirement with regard to rate

of pension payable to the petitioner. It is submitted that, accordingly,

the Board had decided to reduce 50% of the eligible pension vide

proceedings dated 25.10.2017. It is contended that the entire aspects

of the matter had been considered and it was found that, in the facts

and circumstances of the instant case, an order of reduction in pension

is perfectly warranted. It is further stated that orders have been passed

treating the period of suspension as leave without allowance.

7. Having considered the contentions advanced on either side, I

notice that this Court in Ext.P7 judgment had specifically directed the

consideration of the contention raised by the petitioner that an order of

reduction of pension has to be passed when the question of penalty is

being considered and not thereafter. A reading of Rule 6(a) would also make it clear that the competent authority is to pass orders authorizing pension to an officer who is compulsorily retired from service

provided no orders are passed reducing the pension by the authority

which imposed the penalty of compulsory retirement.

8. The rule specifically reads as follows:-

“6. (a) An employee compulsorily retired from service by way of

penalty may be granted by the authority competent to impose

such penalty, pension and death-cum-retirement gratuity

admissible to the employee on the date of such retirement,

provided, however that the authority imposing the penalty of

compulsory retirement may order at reduction either in pension

or in death-cum-retirement gratuity or in both if the

circumstances of any particular case warrant such reduction.”

9. In the instant case, the order reducing the punishment of

removal to compulsory retirement had been passed by the appellate

authority as early as on 06.08.2015. The entire records of the enquiry

along with the appeal submitted by the petitioner were available with

the 2nd respondent when Ext.P1 order was rendered. However, after

adverting to the gravity of the charges proved against the petitioner,

but taking a lenient view, the 2nd respondent decided to modify the

punishment of removal as compulsory retirement with effect from the

date of removal from service. There was no decision taken in Ext.P1

to order reduction of pension. It is admitted that a writ petition had

been filed by the petitioner as against Ext.P1, pending the same, the

petitioner had preferred Ext.P3 representation seeking release of

pensionary benefits. It is thereafter that Ext.P4 order was passed on

25.10.2017.

10. It is trite law that pension is a legal right available to an

employee on the basis of long years of service rendered by him and

the said right can be taken away only after following due procedure.

It is pertinent to note that even in a case where an employee is

dismissed or removed for misconduct, insolvency or inefficiency,

compassionate allowances amounting to 2/3rd of the pension can be

granted in special circumstances. Further, Rule 6(c) provides that

where a person, who has been granted pension on compassionate

retirement dies, and his family is entitled to a family pension under

Section 7 of Part III KSR.

11. On a close reading of the provisions of the KSEB Employees

(Classification, Control & Appeal) Regulations, I notice that orders

adverse to the interest of an employee are liable to be passed after

conduct of a due enquiry as provided in the said Regulations. Rule

6(a) of Part III, KSR provides that pension and death-cum-retirement

gratuity admissible to the employee on the date of such retirement is

liable to be granted to an employee by the competent authority

provided that the authority imposing the penalty may order reduction

if the circumstances of any particular case warrant such reduction.

Therefore, the question whether a particular case where compulsory

retirement is imposed warrants reduction in pension or gratuity or both

is to be specifically considered by the authority imposing the

punishment. According to me, it appears that such consideration

whether the penalty should result in any reduction in pension or

DCRG is a decision which has to be taken by the authority at the time of imposition of penalty itself. If not, the entire exercise of

appreciation of the factors which lead to the imposition of the penalty will have to be redone at a later point in time which, according to me, would be impermissible since that would amount to a re-appreciation of the facts involved and therefore to double jeopardy.


12. In the above facts and circumstances, I am of the opinion that

the impugned order rejecting the claims of the petitioner is

unsustainable. The same is therefore set aside. There will be a

direction to the respondents to pay the pensionary benefits due to the

petitioner, taking note of the fact that the order of compulsory

retirement imposed on the petitioner by Ext.P1 did not provide in any

reduction in pension. The monetary benefits with arrears thereof shall

be calculated and released to the petitioner within a period of three

months from the date of receipt of a copy of this judgment. The

request of the petitioner for regularizing the period of suspension as

duty, as also the grant of arrears thereof, shall be considered by the

respondents with notice to the petitioner. Appropriate orders shall be

passed within a period of 3 months from the date of receipt of a copy

of this judgment.

This writ petition ordered accordingly.

Sd/-

ANU SIVARAMAN

JUDGE

NP

WP(C) NO. 9290 OF 2021

13

APPENDIX OF WP(C) 9290/2021

PETITIONER’S EXHIBITS

EXHIBIT P1 TRUE COPY OF ORDER NO.VIG/A1/4695/06 DATED

06/08/2015 BY R2.

EXHIBIT P2 TRUE COPY OF NON LIABILITY CERTIFICATE DATED

29/3/2016.

EXHIBIT P3 TRUE COPY OF PETITION DATED 17/7/2017 BY

PETITIONER.

EXHIBIT P4 TRUE COPY OF ORDER NO.VIG/A1/4695/2006/2772 DATED

25/10/2017 BY R2.

EXHIBIT P5 TRUE COPY OF PETITION DATED 20/12/2019 BY

PETITIONER.

EXHIBIT P6 TRUE COPY OF LETTER DATED 12/2/2020 FROM CHIEF

VIGILANCE OFFICER.

EXHIBIT P7 TRUE COPY OF JUDGMENT DATED 16/12/2020 IN WP(C)

6725/2020.

EXHIBIT P8 TRUE COPY OF PETITION DATED 22/1/2021 BY

PETITIONER.

EXHIBIT P9 TRUE COPY OF ORDER NO.VIG/A1/4695/2006/401 DATED

23/2/2020 BY R2.

EXHIBIT P10 TRUE COPY OF CIRCULAR NO.65/94/FIN. DATED

26/11/1994.

EXHIBIT P11 TRUE COPY OF SUSPENSION ORDER DATED 21/6/2006.

EXHIBIT P12 RUE COPY OF REINSTATEMENT ORDER DATED 7/11/2006.

EXHIBIT P13 TRUE COPY OF ORDER DATED 23/1/2017 BY R2

REGULARISING SUSPENSION.

RESPONDENTS’ EXHIBITS: NIL

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