B.B. Rajendra Prasad v. Union of India

2. The Petitioner has approached this Court by way of this writ petition challenging the judgment and order passed by the Central Administrative Tribunal dated 5 August 2022 dismissing the Original Application No.81/2021 filed by the Petitioner. The petition concerns the retiral benefits of the Petitioner.

3. The Petitioner retired as a Commissioner of Income Tax. Respondent No.1 is the Union of India through the Ministry of Finance; Respondent No.2 is the Central Board of Direct Taxes; Respondent Nos.3, 4 and 5 are Principal Chief Commissioner of Income Tax; Chief Commissioner of Income Tax; and Commissioner of Income Tax (DR), Income Tax Appellate Tribunal.

4. The Petitioner belongs to the 1992 batch of Indian Revenue Service. He joined the service on 5 January 1993 as Assistant Commissioner of Income Tax. The Petitioner was thereafter promoted to the Selection Grade post of Joint Commissioner of Income Tax in October 2003. Thereafter, he was promoted as Additional Commissioner of Income Tax to the cadre of Commissioner of Income Tax in 2015. The Petitioner was posed in various regions, such as Karnataka and Tamil Nadu, during his service. He was also posted as Commissioner of Income Tax (Appeals) in Mumbai. After that, he was posted as Commissioner of Income Tax (DR) Income Tax Appellate Tribunal, Mumbai.

5. A First Information Report (FIR) was registered by the Central Bureau of Investigation (CBI), Anti Corruption Branch, Visakhapatnam vide RC 08(A)/2017 on 1 May 2017. It was alleged in the FIR that the Petitioner demanded illegal gratification punishable under sections 7 and 12 of the Prevention of Corruption Act, 1988 and section 120B of the Indian Penal Code. The Petitioner was arrested, and later released on bail. On 31 July 2017, another FIR bearing No.RC 12(A)/2017 under section 13(2), read with section 13(1)(e) of the Prevention of Corruption Act, was filed on the allegation that the Petitioner has assets disproportionate to his known source of income. The Petitioner was placed under suspension. The Petitioner filed an Original Application in the Tribunal challenging the suspension. The Tribunal, by order dated 29 May 2018, quashed the order of suspension. The Petitioner was reinstated, and he joined duty on 18 July 2018. In 2019, the Petitioner was posted as Commissioner of Income Tax (DR) Income Tax Appellate Tribunal, Rajkot, where he was compulsorily retired from service with effect from 11 June 2019. The action of compulsory retirement was taken under Rule 56(j) of the Fundamental Rules.

6. The Petitioner submitted his claim papers for regular pension to the Respondents; however, he did not receive any response for almost a year. The Petitioner received a communication by email, including the order dated 15 June 2020. This order was effected from 12 June 2019. The said order reads as follows: “In exercise of power conferred under Rule 69(1)(a) of the Pension Rules of CCS (Pension) Rules, 1972 and in pursuance of ZAO, CBDT, Rajkot’s letter No. Z0/RJT/BRR/2020/133 dated Date: 15/6/2020, provisional pension @ Rs.91,350/- (Rupees ninety one thousand three hundred fifty only) and D.A. as admissible w.e.f. 12/06/2019 is hereby sanctioned to Shri B.B. Rajendra Prasad, Commissioner of income-tax (DR), ITAT, Rajkot compulsorily retired w.e.f. 11/06/2019 (A.N.) This order shall be effective from 12/06/2019 and valid during the period commencing from the date of retirement up to and including the date of which after the conclusion of departmental or judicial proceeding, final orders are passed by the competent authority.” This order was issued as per Rule 69(1)(a) of Central Civil Services (pension) Rules 1972. Being aggrieved by this communication, the Petitioner made a representation on 15 June 2020 and 30 June 2020 against the order granting a provisional pension. Since they did not fructify in a favourable order, the Petitioner filed Original Application No.81/2021 in the Central Administrative Tribunal.

7. In the Original Application, the Petitioner contended that as per rules, compulsory retirement under section 56(j) of the Fundamental Rules makes an officer eligible for all and full retirement benefits, particularly when there is no proceeding instituted against him on the date of retirement or on the date of the impugned order of provisional pension and therefore, the Respondents have no justification not to authorize the regular retirement benefits of the Petitioner. According to the Petitioner, throughout his service career, the Petitioner had an excellent performance, and he never received any adverse remarks. The Petitioner contended there were no disciplinary proceedings/ judicial proceedings instituted against the Petitioner on the date the Petitioner was compulsorily retired under Rule 56(j) of the Fundamental Rules and even till the date of the impugned order of provisional pension, i.e., 15 June 2020. In the Original Application, the Petitioner placed on record information regarding two First Information Reports filed against the Petitioner on 1 May 2017 and 31 July 2017. Petitioner contended that both the FIRs were filed in May 2017, and nothing was known about the action thereupon. The Petitioner asserted that no departmental enquiry was instituted against him on the date of his retirement and even till the date of grant of provisional pension on 15 June 2020. The Petitioner accordingly prayed that the Petitioner is entitled to full pension benefits, that is, regular pension and all retiral benefits. The Petitioner contended that invocation of section 69(1)(a) under the CCS (Pension) Rules, 1972 was incorrect. Accordingly, the Petitioner prayed that the order dated 15 June 2020 be revised to include all retiral benefits such as regular pension, commutation of pension, leave encashment and gratuity.

8. The Respondents filed an affidavit-in-reply and opposed the Original Application. The Respondents contended that pensionary benefits cannot be granted to the Petitioner as disciplinary and criminal proceedings were pending against him. It was contended that although the Petitioner retired on 10 June 2019, the departmental charge memorandum was issued against the Petitioner on 26 April 2021. It was contended that the Petitioner entered into a criminal conspiracy and demanded illegal gratification in lieu of passing a favourable appellate order in favour of one Trust for the assessment year 2013-14. He decided an appeal in favour of the Trust on the basis of inadmissible additional evidence, nullifying the tax demand. The CBI caught the Petitioner red-handed on 2 May 2017 while receiving/accepting illegal gratification at his residence. The CBI has registered a case against the Petitioner, based on search action conducted on 1 May 2017, for allegedly accepting illegal gratification for passing favourable order in favour of a Trust. It was contended that subsequently, the CBI registered a Disproportionate Assets case on 31 July 2017 under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act against the Petitioner. It was submitted that the disciplinary proceedings are pending for major penalty proceedings vide charge memo dated 23 June 2021. The Respondents submitted that the disciplinary and criminal proceedings are still pending against the Petitioner and, thus, till the same do not culminate in the acquittal or discharge of the claimed in the Original Application. The Petitioner is only entitled to the grant of provisional pension, which is being paid to him. The Respondents thus submitted that once an order under Rule 56(j) of the Fundamental Rules is passed against an employee, he is entitled to his service and retiral benefits, but in case any disciplinary proceedings or criminal case are pending, the employee concerned is entitled to provisional pension only and further entitlement is decided on the closure of the proceedings and outcome thereof. In the facts of the present case, the disciplinary as well as criminal proceedings are pending against the Petitioner, and he is thus entitled to provisional pension only, which is being paid to him. Hence, the Respondents submitted that the Original Application is liable to be dismissed.

9. The Tribunal referred to Rules 9(4) and (6) and Rule 69(1)(b) of the CCS (Pension) Rules, 1972; Rule 4 of the Central Civil Services (Commutation of Pension) Rules, 1981; and Rule 39(3) of the Central Civil Services (Leave), 1972. The Tribunal held that a combined reading of these Rules makes it clear that the date of institution of criminal proceeding against the retiring government servant is the determining factor of considering his eligibility for pension, gratuity, commuted value of pension and leave encashment on or soon after the date of his retirement from government service. The Tribunal noted Rule 9(6)(b)(i) of CCS (Pension) Rules and observed that the crucial position would be the date on which the chargesheet is filed by CBI against the Petitioner, and the Magistrate took cognisance thereof. Having framed this issue, the Tribunal observed that both the Petitioner and the Respondents have not placed in their pleadings the date the CBI filed the chargesheet against the Petitioner and when the Magistrate took cognisance of it. The Tribunal also held that the parties had not filed copies of FIRs or chargesheet or the nature of the offence. After recording this, the Tribunal discussed the decisions of the Hon'ble Supreme Court as to when the departmental/ criminal prosecution can be considered as initiated against an employee. After that, the Tribunal concluded that in the present case, when the Petitioner was retired under Rule 56(j) of the Fundamental Rules, the prosecution was pending against the Petitioner as the FIRs were lodged. Then the Tribunal went to hold that the charges against the Petitioner were grave and departmental proceedings initiated against the Petitioner were pending, the terminal benefits cannot be released to the Petitioner and, accordingly, the Original Application was dismissed. Being aggrieved by the said order, the Petitioner is before us.

10. We have heard Mr.Rajeev Kumar for the Petitioner and Mr. R.R. Shetty for the Respondents.

11. The Petitioner has reiterated his stand that when the order was passed against the Petitioner compulsorily retiring him under Rule 56(j) of the Fundamental Rules, there was no criminal or departmental proceeding pending as contemplated in Rules 9(4) and 9(6) of the CCS (Pension) Rules and therefore Rule 69 of the CCS (Pension) Rules, Rule 4 of the CCS (Commutation of Pension) Rules and Rule 39(3) of the CCS (Leave) Rules could not have been invoked. The Respondents, as stated above, asserted that judicial and departmental proceedings were pending on the date when the order under Rule 56(j) of the Fundamental Rules was passed against the Petitioner. This is, therefore, a narrow controversy before us.

12. Reply affidavit is filed by the Respondents in this petition. It is stated therein that advance pay of 3 months has been disbursed to the Petitioner on 11 June 2019. A salary of 11 days of June 2019 of Rs.85,747/- has been approved and paid by the office at Rajkot. Similarly, the General Provident Fund has been paid by the office at Rajkot and also CGEGIS and leave encashment. The provisional pension of Rs.8,53,450/- and Rs.1,06,880/- has been paid. A reference is made to a communication dated 13 July 2020 that a regular pension has not been approved as per Rule 69(1)(a) of the CCS (Pension) Rules for want of vigilance clearance. The deponent of this affidavit, who is Deputy Commissioner of Income Tax (HQ), Service Litigation, has stated that his office had sent letters and reminders to the Director General, New Delhi (Vigilance); however, vigilance clearance has been withheld and, therefore, payment of gratuity and pension has not been made. In the reply, reference is made to the FIRs filed against the Petitioner on 1 May 2017 and 31 July 2017. It is then stated that the statement of articles of charges framed against the Petitioner is as per the annexure to the memorandum dated 23 July 2021. It is stated that, therefore, since judicial and criminal proceedings were pending on the date of compulsory retirement of the Petitioner, the Petitioner is only entitled to the provisional pension. In the affidavit, reliance is placed on the decision of the Hon’ble Supreme Court in the case of Union of India v. K.V. Janki Raman[1] in respect of starting of the prosecution and in the case of CBI v. Shashi Balasubramanian[2]. Therefore, in the case of the Respondents, which is also a finding of the Tribunal that on the date of the compulsory retirement of the

Petitioner, there were disciplinary and criminal proceedings pending against the Petitioner and, therefore, regular pension and other benefits cannot be granted.

13. We have considered the submissions. It is not disputed before us that a Government servant who is compulsorily retired as per Rule 56(i) of the Fundamental Rules would otherwise be entitled to full pensionary benefits. However, it is argued by the Respondents that in the case of the Petitioner, Rule 69 of the CCS (Pension) Rules, Rule 4 of CCS (Commutation of Pension) Rules and Rule 39(3) of the CCS (Leave) Rules are attracted in the Petitioner case.

14. The Tribunal, in the impugned order, has referred to various decisions of the Hon'ble Supreme Court and has substantially observed in favour of the Petitioner that in paragraph 13 of the order from where we quote as under: “13. ….. Therefore, in the present case when the applicant was retired under FR 56(j), prosecution was pending as FIRs had been lodged. There is another reason for me to deny the relief to the applicant, i.e., as on date the departmental proceedings are going on under Rule 9 of the CCS (Pension) Rules, which is admitted by both the parties, as such the question of granting full pension today, does not survive unless the said departmental proceedings reach a culmination. It is not in dispute that retirement under FR 56(j) makes an officer eligible for all and full retirement benefits. These retirement benefits would include regular pension, commutation of pension, leave encashment for the earned leave balance on the date of retirement and gratuity. The retiral benefits are matter of right to life under Article 21 of the Constitution. In a catena of judgments by the Hon'ble Supreme Court and the Hon'ble High Courts enunciated that pension and other terminal benefits are matter of right of the employee. Gratuity and leave encashment are a part of the salary, which | is regulated at the time of retirement. It is neither a charity nor a free gift by the respondent-employer herein. That non-grant/ delaying grant of retirement amounts to harassing the officers irrespective of whether an employee retired under FR 56(j) or by way of superannuation and subjecting them to unjust and unfair treatment, which could be treated as arbitrariness on behalf of the respondents and, therefore, Articles 21 and 14 of the Constitution of India are invocable against such arbitrariness, more so when seen in juxtaposition to the long-standing career and services rendered to Government of India. In D.S. Nakara and Ors. Vs Union of India (1983) 1 SCC 305, the Hon'ble Supreme Court laid down a law that "the pensionary benefit is a matter of right of the employee and not a bounty by the Government". Under the circumstances, granting provisional pension and withholding other terminal benefits earned by the employee during the course of employment, ordinarily would be violation of his right to equality and the right to life guaranteed by the Constitution, in addition to being violative of service jurisprudence. …..” (Emphasis supplied) After this observation, the Tribunal non-suited the Petitioner on the ground that an important point to consider is what the charges against the Petitioner and that since the allegations are grave for which departmental proceedings are pending, the retiral dues, including regular pension, commutation of pension cannot be released to the Petitioner. After observing that pension and terminal benefits are not bounties or charity or free gifts by the employer, the Tribunal makes no reference to any statutory Rule as to why the Petitioner has been denied the retiral benefits. The analysis of the statutory provisions and facts on record would show that the approach of the Tribunal is clearly erroneous

15. The Petitioner was compulsorily retired from service, invoking Rule 56(j) of the Fundamental Rules. Rule 56(j) reads thus: “F.R. 56: (a) to (i) ….. ….. ….. ….. …… (j) Notwithstanding anything contained in this rule, the Appropriate Authority shall, if it is of the opinion that it is in the public interest to do so, have the absolute right to retire any Government servant by giving him notice of not less than three months in writing or three months' pay and allowances in lieu of such notice: