(1) This Special Appeal has arisen out of the judgment/order rendered by the Writ Court in Writ-A No.5341 of 2012 on 01.03.2023. By means of the impugned judgment, the Writ Court has allowed the writ petition with a further direction to pay retiral dues along with interest @ 7% per annum up to the actual payment made. Four months period was granted for making compliance of the judgment passed. The appellants, namely, U.P. Jal Nigam have come up against the aforesaid judgment in the present intra-court appeal filed under Chapter VIII Rule 5 of the High Court Rules.
(2) Learned counsel for the appellants has submitted that the respondent-petitioner had retired from service from the post of Junior Engineer on 30.04.2010. This fact was not disputed by the appellants before the Writ Court as well. It appears that a show cause notice was issued on 16.03.2011 against the respondent-employee alleging therein some irregularities on the strength of certain communications which were made from 2009 to 2010 while he was in service.
(3) In these circumstances, the case at hand is a case of initiation of proceedings after an employee,who had already retired from service. Learned counsel for the appellants has submitted that by virtue of an office memorandum dated 03.02.2003 the Board of Directors, erstwhile U.P. Jal Nigam had passed a resolution whereby the applicability of Civil Service Regulations as well as U.P. Government Servant (Discipline and Appeal) Rules, 1999 (here-in-after referred to as 'the Rules, 1999') was extended by reference to the employee of erstwhile U.P. Jal Nigam with a modification in Regulation 351-A. The modification in Regulation 351-A was to the extent that the word "Governor" shall be read as the Board of Directors. Therefore, the aforesaid rules became applicable to the retired employees of U.P. Jal Nigam for all purposes.
(4) Learned counsel for the appellants has argued that once the aforesaid rules are applicable to the retired employees of erstwhile U.P. Jal Nigam, leaned Single Judge fell in error while observing that no departmental proceedings were initiated or the ingredients of Regulation 351-A were not available; and the observations so recorded being perverse would vitiate the judgment impugned herein.
(5) According to the learned counsel, the issuance of show cause notice for the purposes of recovery did constitute initiation of departmental proceedings as per law and action taken for recovery from retiral dues and pension was after following the procedure of show cause notice calling for a reply duly complied with before passing the recovery order, thus, it was not open to the Writ Court to strike down the recovery order on such a ground. Learned counsel for the appellants has further argued that it is not a case where respondent-petitioner was deprived of the retiral dues without following due procedure under law and the case at hand was erroneously construed to be deprivation of property contrary to the mandate of law as provided under Article 300-A of the Constitution of India. Learned counsel for the appellants has also argued that the order of recovery passed after issuance of a show cause notice did not require any other except what was followed. The respondent-employee submitted his reply in response to the show cause notice and the same was considered by the competent authority while passing the order dated 18.08.2012 as well as the order dated 17.10.2011 giving rise to the writ petition.
(6) The sum and substance of the arguments made by the appellants' counsel is that the action taken against the respondent-petitioner being in consonance with the law and having afforded adequate opportunity, did not suffer from any jurisdictional error or procedural error. Therefore, allowing the writ petition in such circumstances along with 7% interest on the payment due is certainly an order contrary to law and deserves to be set aside.
(7) Ms. Savita Jain, learned counsel appearing for the respondent-petitioner not disputing the fact that a resolution was passed by the Board of Directors on 03.02.2003, whereby, Civil Service Regulations as well as the Rules, 1999 were made applicable to the employees of erstwhile U.P. Jal Nigam, has submitted that it is a case of retired employee, who could not be visited with punishment of recovery except by following rigors of Regulation 351-A in its strict language and the scope thereof. Learned counsel for the respondent-petitioner inviting our attention to the resolution passed by the Board of Directors on 09.06.2011 has pointed out that even the resolution of the Board placed before this Court is a resolution passed much later than the issuance of show cause notice dated 16.03.2011 to which the respondent-petitioner helplessly submitted his reply on 13.04.2011 and thereafter the recovery order was passed on 18.08.2012. It is, thus, submitted that even if there existed a power with the Board to initiate the proceedings by resolution against the retired employee in terms of Regulation 351-A of the Civil Service Regulations, yet, the same was not available as on the date of issuance of show cause notice and the same lacked the sanctity of law. Mere reply submitted against the show cause notice which was without jurisdiction would not legitimise the same and the defence remains open.
(8) Having regard to the submissions put forthwith by the learned counsel representing the respondent-petitioner, it would be necessary to refer to the Regulation 351-A of the Civil Service Regulations and relevant extract of the Regulations is reproduced herein:
Note: The Governor to be read as "the Board of Directors".
"351-A. The Governor reserves to himself the right of withholding or withdrawing a pension or any part of it, whether permanently or for a specified period and the right of ordering the recovery from a pension of the whole or part of any pecuniary loss caused to Government, if the pensioner is found in departmental or judicial proceedings to have been guilty of grave misconduct, or to have caused pecuniary loss to Government by misconduct or negligence, during his service, including service rendered on re-employment after retirement :
Provided that-
(a) such departmental proceedings, if not instituted while the officer was on duty either before retirement or during re-employment-
(i) shall not be instituted save with the sanction of the Governor.
(ii) shall be in respect of an event which took place not more than four years before the institution of such proceeding; and
(iii) shall be conducted by such authority and in such place or places as the Governor may direct and in accordance with the procedure applicable to proceedings on which an order of dismissal from service may be made.
(b) judicial proceedings, if not instituted while the officer was on duty either before retirement or during re-employment, shall have been instituted in accordance with sub-clause (ii) of clause (a); and
(c) the Public Service Commission, U.P., shall be consulted before final orders are passed.
[Provided further that of the order passed by the Governor relates to a cash dealt with under the Uttar Pradesh Disciplinary Proceedings, (Administrative Tribunal) Rules, 1947, it shall not be necessary to consult Public Service Commission].
Explanation- For the purposes of this article-
(a) departmental proceedings shall be deemed to have been instituted when the charges framed against the pensioner are issued to him or, if the officer has been placed under suspension from and earlier date, on such date; and
(b) judicial proceedings shall be deemed to have been instituted:
(i) in the case of criminal proceedings, on the date on which complaint is made, or a charge-sheet is submitted, to a criminal court; and
(ii) in the case of civil proceedings, on the date on which the plaint is presented or, as the case may be, an application is made, to a civil court.
Note- As soon as proceedings of the nature referred to in this article are instituted the authority which institutes such proceedings shall without delay intimate the fact to the Audit Officer concerned."
(9) The structural analysis of Regulation 351-A is a prudent way for our purpose leads us to deduce the following principles which are not exhaustive:
(I.) Regulation 351-A by virtue of its opening sentence applies to pension or any part thereof and nothing more.
(II.) Regulation 351-A requires sanction of Governor, if departmental proceedings are not instituted while the officer was on duty before retirement or during re-employment.
(10) The necessary concomitants of Regulation 351-A for the purposes of continuity or initiation of proceedings is the pecuniary loss caused to the employer while in service or if the proceedings are initiated after retirement, such loss is bound to be shown to have occurred out of an event four years before the date of initiation of proceedings and for which the procedure to be followed would be of the proceedings on which an order of dismissal from service may be made, meaning thereby, that witholding of pension or any part thereof, is a major penalty.
(11) In the present case, it is not the case of appellants that any proceeding whatever was initiated against the respondent-employee within the meaning of disciplinary action before retirement. Even if, it may be assumed that the disciplinary proceedings in the matter for recovery of pecuniary loss are initiated with the issuance of show cause notice, yet the same in the present case was issued after the date of retirement, therefore, the case at hand is a case of initiation of proceedings after retirement.
(12) The impugned notice was issued under Regulation 351-A of Civil Service Regulations read with Rule 9(1) of U.P. Retirement Benefits Rules, 1961. Rule 9(1) of the U.P. Retirement Benefits Rules, 1961 is also extracted hereunder:
"9. Miscellaneous.-(1) Government will have the right to effect recoveries from a gratuity or family pension sanctioned under Parts II and III in the same circumstances as recoveries can be effected from an ordinary pension under Article 351-A of the Civil Service Regulations."
(13) A conjoint reading of Regulation 351-A and Rule 9(1) extracted above leads to a simple inference that the proceedings for recovery from pension, wholly or in part, or any amount from retiral dues, cannot be initiated save with the sanction of Board of Directors.
(14) In the present case, the notice on 16.3.2011 necessarily ought to have been issued after the sanction by the Board of Directors but there is no such sanction of the Board of Directors for any such notice, therefore, the same was without jurisdiction. The resolution placed on record passed by the Board of Directors on 9.6.2011 was clearly not in existence on the basis of which the notice dated 16.3.2011 could be issued. The resolution dated 9.6.2011 under agenda item no. 155.12(ba) had resolved as under:
(15) A close reading of the minutes of the resolution aforesaid clearly shows that sanction for proceedings under Regulation 351-A alone was approved and there is no reference to Rule 9(1) of U.P. Retirement Benefit Rules, 1961 for the purposes of any recovery from gratuity or family pension.
(16) Needless to reiterate that Regulation 351-A merely provides for the recovery of loss caused to the employer by the employee from pension payable to him, wholly or in part whereas Rule 9(1) postulates recovery from the amount of gratuity or family pension admissible to an employee. In both eventualities the procedure applicable to the proceedings is the same on which an order of dismissal from service may be made, meaning thereby that the competent authority after obtaining sanction from the Board of Directors is bound to hold a regular enquiry against the charged pensioner and draw the proceedings accordingly.
(17) When the requirement of law is applied to the case at hand, it becomes clear that the competent authority had merely issued a show cause notice to the respondent-employee without drawing up any charge sheet reducing the facts in the form of definite charges as provided under Rule 7 of U.P. Government Servants (Discipline and Appeal) Rules 1999.
(18) There is no explanation either before the writ court or in appeal arising out of the writ court order, as to why such a procedure was not followed before passing the impugned order.
(19) In nutshell the impugned order was passed in utter violation of the requirements of Regulation 351-A, therefore, the justification pleaded on the basis of the resolution passed by the Board of Directors on 09.06.2021 if assumed valid, yet the procedure adopted does not satisfy the mandate of law.
(20) This Court would note that recovery from the retiral dues permitted to be made from a pensioner under Rule 9(1) of the U.P. Retirement Benefit Rules, 1991 are sanctified in no other manner than conditions provided under Regulation 351-A of Civil Service Regulations, therefore, any such action would also require a specific resolution to be passed by the Board of Directors for that purpose which in the instant case does not seem to have been done at all. The impugned order seeking to recover the pecuniary loss from the retiral dues payable to the respondent-employee without there being any sanction of the Board of Directors, in the facts and circumstances of the case is wholly without jurisdiction. This view is supported by a judgment rendered by the Apex Court in the case of U.P. State Sugar Corporation Ltd. vs. Kamal Swaroop Tondon, reported in (2008) AIR SCW 1241 and a Division Bench judgment of the Bombay High Court at Aurangabad in the case of Ratnakar Bhagwanrao Mahajan vs. District and Sessions Judge, Jalna and another, decided on 24.09.2008 (W.P. No.2555 of 2008).
(21) The impugned action resorted to in the instant case is bad in the eye of law for more reasons than one when analysed empirically but for the present, if the proceedings fall on the touchstone of want of sanctity by the Board of Directors as per law and the essential procedure which the competent authority ought to have followed but has failed, therefore, we are unable to differ with the observation of the learned Writ Court that the ingredients of Regulation 351-A were not followed.
(22) For the reasons spelt out in the impugned judgment as well as what has been recorded above, the impugned judgment on the grounds urged before us in this appeal do not lead us to a different view calling for interference and the Special Appeal arising out of the judgment impugned is hereby dismissed. The direction for payment of arrears along with interest @ 7% is however set aside in the peculiar facts of the case.
(23) Before parting, we may observe that the case at hand clearly shows that the competent authority as well the Board of Directors at the relevant point of time acted dehors the rules which, in fact, has occasioned the loss to the Nigam simply on account of their non-obedience to the rules well known.
(24) It is a deliberate failure of the competent authority and the Board to follow the procedure prescribed under law that the imputations of pecuniary loss levelled against the employee were rendered incapable of being converted into an actionable claim. The competent authority in place at the time of issuing the notice as well as the Board responsible at the relevant point of time deserve to be proceeded against both for civil action for recovery as well as criminal action permissible under law.
