M. Karpaga Vinayagam, C.J.@mdashThe short facts leading to the filing of the letters patent appeal are as follows:
(i) The appellant was the District Animal Husbandry Officer. He retired from Service on 30.06.2001.
(ii) He is one of the accused in a fodder scam case, investigated by the C.B.I., namely, R.C. 47(A)/96.
(iii) After investigation, chargesheet has been filed against the appellant. The case is still pending.
(iv) After retirement, group insurance and G.P.F. amount has been paid. He has also been granted 90% of the pension.
(v) In regard to the other retrial benefits, like Gratuity and leave encashment, the appellant filed a writ petition being W.P.(S) No. 635 of 2003.
(vi) The learned Single Judge disposed of the said writ petition on 28.03.2003 directing the Secretary, Animal Husbandry to look into the matter
and release the admitted retrial dues.
(vii) In pursuance of the order, the Secretary, Department of Animal Husbandry passed an order on 06.06.2003 withholding the 10% pension,
Full Gratuity and Full Leave Encashment amount till the disposal of the criminal case pending against him in RC 47(A)/96 under Rule 47(b) of the
Pension Rules.
(viii) Aggrieved by the same, the appellant challenged the said order in W.P.(S) No. 1491 of 2004. Learned Single Judge dismissed the same on
27.08.2004. Therefore, the present appeal has been filed raising the point that the Government has no power to withhold full pension, gratuity and
leave encashment pending criminal proceeding.
(ix) When this matter came up before the Division Bench, a judgment in L.P.A. No. 752 of 2004 rendered by a Division Bench, dated
02.02.2006, holding that the appellant was not entitled to any amount other than 90% of the provisional pension and 90% Gratuity, was brought to
the notice by the learned Counsel for the respondents to justify the order withholding the payment.
(x) Since in the above judgment in L.P.A. No. 752 of 2004, it was indicated that the appellant was not entitled to any amount including the leave
encashment other than 90% of the provisional pension and 90% of the Gratuity amount, the Division Bench thought it fit to refer to Larger bench
for a decision as it felt doubt about the correctness of the same in the light of the absence of the rule providing such power to the State. While
referring the matter, the Division Bench framed the following question:
Whether in absence of any rule/guideline, the State Government has jurisdiction to withhold leave encashment or part of it, permanently or
temporarily, or can recover the leave encashment, on the ground of pendency of a departmental or criminal proceeding or on the ground that the
retired employee has been convicted in a judicial proceeding or found guilty in a departmental proceeding?
(xi) Accordingly, the Chief Justice referred to Larger Bench. That is how this matter has come up before this Full Bench.
2. The submissions of the learned Counsel for the appellant in brief is as follows:
(A) The Government has no power to withhold pension/gratuity and leave encashment on the ground of pendency of judicial/departmental
proceeding.
(B) Rule 43 of Bihar Pension Rules provides the withholding of the pension amount only when the pensioner is found to be guilty of grave
misconduct, in the Departmental or Judicial Proceedings. In this case no departmental proceeding concluded finding him guilty nor any judicial
proceeding ended in conviction finding him guilty. Admittedly, leave encashment is not covered under Rule 43. Therefore, the order passed by the
department withholding the 10% pension and entire gratuity and entire leave encashment under this Rule is wholly illegal.
3. The reply by the counsel for the respondents-department is as follows:
(A) State Government has got power to withhold pension, which also includes gratuity under Rule 43(a) and 43(b) pending disposal of the
departmental and judicial proceedings as an interim measure so that after conclusion of the proceedings, final order may be passed depending upon
the result of the departmental or judicial proceeding.
(B) Even though leave encashment has not been mentioned under Rule 43(a) and 43(b), the State Government already issued a circular through
Finance Department on 22.08.1974 under Rule 5 of the Bihar Service Code, prohibiting the payment towards the Gratuity as well as Leave
Encashment, and as such the State Government is well within its power to pass the impugned order dated 06.06.2003 withholding the Gratuity and
Leave Encashment.
4. With reference to the Circular sought to be relied upon by the counsel for the respondents, the counsel for the petitioner would submit that the
said circular has no force of law since the same has been issued without any power conferred under the Act or Rules.
5. In the light of the above rival contentions, we are of the view that two questions would arise for consideration:
(i) Whether the Government has got power to withhold pension, gratuity and leave encashment amount on the ground of pendency of judicial or
departmental proceeding?
(ii) Whether the circular or guidelines issued by the Finance Department including the Circular No. 4564 dated 06.07.1993, conferring powers for
withholding payment of Gratuity and leave encashment on the ground of pendency of judicial or departmental proceeding is legal, valid and has got
force of law?
6. Let us straight away go to the questions referred to above.
7. The first question relates to the powers of the Government to withhold the retiral benefits and leave encashment on the ground of pendency of
proceedings.
8. Let us now look into and refer to the order impugned, dated 06.06.2003, by which the State withheld 10% of his pension amount, full gratuity
and leave encashment as per Rule 43(b) of the Bihar Pension Rules. The order dated 06.06.2003 is as follows:
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Ik''kqikyu
,oa erL; foHkkx
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Mk0 nw/kukFk ik.Ms;] lsokfuo`Rr ftyk i''kqikyu inkf/kdkjh] gtkjhckx }kjk lsok fuo`Rr ykHkks ds Hkqxrku gsrq ekuuh; kj[k.M+ mPp U;k;ky;
jkWaph es okkn la[;k& MCyw0 ih0�,l� 635@2003 nk;j fd;k x;k FkkA
mDr okn es ekuuh; kj[k.M+ mPp U;k;ky;] jkaph }kjk fnukad&28-3-2003 dks ikfjr U;k;kns''k ds vkyksd es fuEu rkfdZd vkns''k ikfjr fd;s tkrs
gS&
1& Mk0 ik.M+s; dh vfuok;Z xzqi chek ;kstuk ,oa lkekU; Hkfo""; fuf/k es lafpr jkf''k dk Hkqxrku gks pqdk gSA
2& muds 90 izfr''kr vkSicaf/kd isa''ku dh Lohd`fr nh tk pqdh gSA
3& pwafd Mk0 ik.Ms; i''kqikyu ?kksVkys lacaf/kr lh0ch0vkbZ0 dk.M+ la0&vkj0lh0@47,@96 iSV es vfHk;qDr gS vkSj muds fo:) ljdkj }kjk
vfHk;kstu dh Lohd`fr iznku dj nh x;h gS] vr% isa''ku fu;ekoyh ds fu;e 43 �ch0� ds rgr muds ''ks""k 10 izfr''kr isa''ku@iw.kZ miknku vkSj
iw.kZ vO;og`r mikftZr vodk''k ds cnys udn jkf''k dk Hkqxrku rRdky yfEcr j[kk tkrk gSA mdr dk.M+ ds fu""iknu ds mijkUr bl lEcU/k es vko'';d
fu.kZ; fy;k tk;sxk A
�g0@& ,0ds0 ljdkj�
ljdkj ds lfpo
English Translation of the order dated 06.06.2003
Jharkhand Government
Animal Husbandry and Fisheries Department
(Animal Husbandry)
((Order))
A case No.-W.P.(S) 635/2003 was filed by Dr. Dudhnath Pandey, Retired District Animal Husbandry Officer, Hazaribagh for payment of retiral
benefits in the Jharkhand High Court, Ranchi.
In the light of the order dated 28.03.2003 passed by the Hon''ble Jharkhand High Court, Ranchi in the said case, the following reasoned orders
are passed:
1. Payment of Dr. Pandey to wards Compulsory Group Insurance and the amount accrued in General Provident Fund has been made.
2. Sanction of his 90% provisional pension has been given.
3. Since Dr. Pandey is accused in the CBI case relating to animal husbandry scam bearing No.-R.C./47A/96 Pat and against him sanction has
accorded by the Bihar Government, therefore, under Rule 43(b) of the Pension Rules his payments of remaining 10% pension/total Gratuity and
the amount against the total unutilized Earned Leave are kept pending for the present. After disposal of the said case necessary decision in this
regard would be taken.
(Sd/- A.K. Sarkar)
Secretary to the Government
9. The order mentioned above discloses the amounts, such as 10% of pension, full gratuity and leave encashment have been withheld under the
powers conferred under Rule 43(b) of the Bihar Pension Rules. Now we will see whether Rule 43(b) confers such power to State Government.
10. Let us now quote Rule 43(b):
43(b) The State Govt further reserve to themselves the right of withholding or withdrawing a pension or any part of it, whether permanently or for
specified period, and the right of ordering the recovery from a pension of the whole or part of any pecuniary loss caused to Govt if the pensioner is
found in departmental or judicial proceeding to have been guilty of grave misconduct, or to have caused pecuniary loss to Govt by misconduct or
negligence, during his service including service rendered on re-employment after retirement.
11. From the reading of the aforesaid Rule 43(b), following facts emerge:
(i) The State government has the power to withhold or withdraw pension or any part of it when the pensioner is found to be guilty of grave
misconduct either in a departmental proceeding or judicial proceeding;
(ii) This provision does not empower the State to invoke the said power while the department proceeding or judicial proceeding are pending.
(iii) The power of withholding leave encashment is not provided under this rule to the State irrespective of the result of the above proceedings.
(iv) This power can be invoked only when the proceedings are concluded finding guilty and not before.
12. Now we will refer to the proviso to Rule 43(b), which reads as under:
Provided that-
a. Such departmental proceedings, if not instituted while the Government Servant was on duty either before retirement or during re-employment.
i. Shall not be instituted save with the sanction of the State Government.
ii. Shall be in respect of an event which took place not more than four years before the institution of such proceedings.
iii. Shall be conducted by such authority and at such place or places as the State Govt. 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 Govt. servant 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 Bihar Public Service Commission, shall be consulted before final orders are passed.
13. This proviso speaks about the initiation of proceedings. For initiating proceedings, Rule 43(b) puts some conditions, i.e., Departmental
proceeding as indicated in Rule 43(b) if not instituted while the Government servant was on duty then it shall not be instituted except: (a) with the
sanction of the Government, (b) it shall be in respect of an event which took place not more than four years before the institution of the
proceedings; (c) such proceedings shall be conducted by the enquiry officer in accordance with the proceedings by which dismissal of the services
can be made.
14. The perusal of proviso and its explanation, referred to above, only deals with the condition for initiation of the proceeding and the period of
limitation within which such initiation of the proceedings can be done and, as such, we are not concerned with since we are called upon to decide
the following question.
15. The question is this ""Whether the mere pendency of departmental or judicial proceeding would empower the Government to withhold pension,
gratuity, leave encashment under Rule 43(b)?
16. Before proceeding further to deal with the said question, let us now look into the various decisions of the Supreme Court as well as this High
Court and the Patna High Court:
(i) D.V. Kapoor Vs. Union of India and others,
The exercise of the power by the President is hedged with a condition precedent that a finding should be recorded either in departmental enquiry
or judicial proceedings that the pensioner committed grave misconduct or negligence in the discharge of his duty while in office, subject of the
charge. In the absence of such a finding the President is without authority of law to impose penalty of withholding pension as a measure of
punishment. [para 6],
(ii) 1995 (2) PLJR 51 (SC) [State of Bihar v. Mohd. Idris Ansari]
A mere look at these provisions shows that before the power under Rule 43(b) can be exercised in connection with the alleged misconduct of a
retired Government servant, it must be shown that in departmental proceedings or judicial proceedings the concerned Government servant is found
guilty of grave misconduct. [para 6]
(iii) 1999(3) PLJR 949 [Bajrang Deo Narain Sinha v. State of Bihar]
We relied upon a decision of the Supreme Court reported in D.V. Kapoor Vs. Union of India and others, for the principle that unless the
pensioner is found guilty of misconduct in a departmental or a judicial proceeding, any part of his pension cannot be withheld. In that case, the
Supreme Court was considering Rule 9 of the Civil Services Pension Rules, 1972 which is in para material with Rule 43(b) of the Bihar Pension
Rules. This Court has also taken the same view in several decisions including the decision in CWJC No. 7315 of 1995 decided on 4.9.1996 and
in State of Bihar and Ors. v. Idris Ansari 1995 AIR SCW 2886. Apart from decisions, the rule is quite clear, and it is only in the case of proved
misconduct that a part or whole of pension can be withheld.
(iv) 2000 (1) PLJR 99 [Kumud Ranjan Tiwari v. State of Bihar]
This Court fails to appreciate as to how the said pensionary dues of the petitioner can be legally withheld without there being any finding of guilt.
This Court in the case of Bajrang Deo Narain Sinha v. The State of Bihar and Ors. (L.P.A. No. 124 of 1999, disposed of on 26.8.1999) [1999
(3) PLJR 949] has held that the pensionary dues payable to the employee including gratuity, which is also pension within the meaning of the Bihar
Pension Rules, cannot be withheld till such time as an order is passed under Rule 43(b) of the Bihar Pension Rules. Similarly, the leave encashment
dues also cannot be withheld since that is paid in lieu of un-utilised leave and, therefore, partakes the character of salary.
(v) 2000 (1) PLJR 192 [Rebati Raman Kant v. Chairman, B.S.E.B.]
In my opinion, in view of the law settled by the Apex Court in the case of D.V. Kapoor (supra) and State of Bihar v. Md. Idris Ansari (supra) the
provisions contained in Rule 43(b) cannot be invoked in the case of the petitioner for withholding of pension. This power cannot be exercised
before the pensioner is found in departmental or judicial proceeding guilty of grave misconduct, or for causing pecuniary loss to the Government by
misconduct or negligence, during his service. [para 19]
The proviso to Rule 43(b) only empowers the State Government to initiate departmental or judicial proceedings, if not instituted while the
Government servant was on duty either before retirement or during re-employment with certain riders as already mentioned above. [para 20]
(vi) 2000 (1) PLJR 870 [Sur Bihari Mandal v. State of Bihar]
This Court is unable to accept the submission of the learned Counsel for the State. Bare reading of the said provision, contained in Rule 43(a) of
the Bihar Pension Rules, it is evident that the power to withhold or withdraw pension is permissible only when the pensioner is convicted of serious
crime or found guilty of grave misconduct and not that even during the pendency of such proceeding the said power can be exercised. The Division
Bench in the case of Bajrang Deo Narain Sinha (supra) held that in absence of any such provision, the State is not authorized to withhold the
pension or any part of it....
Similarly the leave encashment dues also cannot be withheld since that is paid in lieu of unutilized leave and therefore, partakes the ""character of
salary"". As per the definition of pension in Rule 27 of the Bihar Pension Rules, it includes gratuity also.
17. The various guidelines which have been given by the decisions, referred to above, are as follows:
(i) The conditions precedent for imposing penalty of withholding pension is that there should be a finding in departmental enquiry or judicial
proceeding that the pensioner committed grave misconduct in the discharge of his duty while in office.
(ii) Before the power under Rule 43(b) can be exercised in connection with alleged misconduct of the retired government servant, it must be shown
that in departmental proceeding or judicial proceeding, the concerned Government servant has been found guilty of grave misconduct.
(iii) Unless the pensioner is found guilty of misconduct in departmental or judicial proceeding any part of his pension cannot be withheld.
(iv) The employee''s right to pension is a statutory right. The measure of deprivation of his pension must be commensurate with the gravity of
misconduct as it offends the right to assistance as framed under Article 41 of the Constitution.
(v) The pensionary dues payable to the employees including Gratuity which is also pension within the meaning of Bihar Pension Rules cannot be
withheld. Similarly, Leave Encashment cannot also be withheld since that is paid in lieu of unutilized leave as it partakes the character of salary.
(vi) The power under Rule 43(b) cannot be exercised before the pensioner is found in departmental or judicial proceeding guilty of grave
misconduct.
(vii) The bare reading of the Rule 43(a) of the Bihar pension Rules would make it evident that the power to withhold or withdraw pension is
permissible only when the pensioner is found to be guilty of grave misconduct and not that during the pendency of such proceedings.
18. In the light of the above guidelines, we will now look into the present facts of this case. In this matter, admittedly, the impugned order dated
06.06.2003 has been passed withholding pension, gratuity and the leave encashment on the ground of pendency of judicial proceedings. It is not in
dispute that the said judicial proceeding has not been concluded. Similarly, it cannot be denied that there is no finding or any conviction holding the
pensioner-appellant guilty of grave misconduct in the above process.
19. As indicated above, that Rule 43(b) does not contemplate the power to withhold the pension etc. during the pendency of judicial proceeding
or departmental proceeding. It contemplates such power only when that pensioner has been found guilty of grave misconduct in those proceeding.
Therefore, Rule 43(b) would not apply in the instant case.
20. It is also to be noticed that Rule 43(b) is relating to withholding of the pension or any part of it. Leave encashment is not covered under Rule
43(b). As such, there is no power given to the State Government to withhold the leave encashment under Rule 43(b) either during the pendency of
the proceeding or after conclusion of the proceedings.
21. Therefore, we are to hold while answering the first question that the Government has no power to withhold pension or Gratuity on the ground
of pendency of judicial or departmental proceedings and there is no power at all for the State Government to withhold the leave encashment under
Rule 43(b) at any stage.
22. Let us now deal with the second question. The second question which is raised as an additional issue due to the stand taken by the counsel for
the respondents that the circular issued by the Finance Department dated 06.07.1993 provides the power to the Government for withholding the
Gratuity and Leave Encashment on the ground of pendency of judicial or departmental proceedings.
23. We shall now go into the question whether the circular issued by the Finance Department dated 06.07.1993 has got a force of law to
empower the Government to withhold the leave encashment amount.
24. It is noticed that there is no statute, rule or any law, which empowers the State Government to withhold the leave encashment. As mentioned
earlier, Rule 43(a) and 43(b) would not provide for the withholding of leave encashment. Under those circumstances, the respondents took the
stand that the withholding of the leave encashment was under the circular issued by the Finance Department.
25. Before we go into the legal sanctity of the circular, it must be remembered that the Leave Encashment is paid on account of unutilized leave and
therefore, it partakes the character of salary. Pension is no longer considered as a bounty. The salary is a property given to the hands of the State
which cannot be withheld except under the powers derived by a statute or law as contemplated under Article 300A of the Constitution of India as
laid down by the Supreme Court in Bharat Petroleum (Erstwhile Burmah Shell) Management Staff Pensioners Vs. Bharat Petroleum Corporation
Ltd. and Others, and Kerala State Road Transport Corpn. Vs. K.O. Varghese and Others,
26. In the light of the ratio laid down by the Supreme Court, let us now see the circular, which has been issued by the Finance Department:
fo""k;%& lsok fuo`fRr dh frfFk dks vO;og`r mikftZr NqV~Vh ds cnys es NqV~Vh osru ds lerqY; uxn jkf''k dk Hkqxrku A
mi;qZDr fo""k; ds izlax es funsZ''kkuqlkj v/kksgLrk{kjh dks dguk gS fd dfri; foHkkxks }kjk ;g ftKklk dh tk jgh gSA fd ;fn fdlh ljdkjh lsod ds fo:)
py jgh foHkkxh; dk;Zokgh] QkStnkjh eqdnek vFkok U;kf;d tkap mlds lsok&fuo`fRr gksus rd vfuf.kZr gks vkSj lEcfU/kr deZpkjh fuyEcu es jgrs
gq, gh lsok&fuo`Rr gks tk;s rks oSlh fLFkfr es vO;og`r mikftZr NqV~Vh ds cnys NqV~Vh osru ds lerqY; uxn jkf''k ds Hkqxrku dk ekeys es
vfUre fu.kZ; rd jksd j[kk tk ldrk gS ;k ugh A Lej.kh; gS fd foRr foHkkxh; Kkikad&2150 fo0 fnukad 19-7-84 �izfrfyfi layXu� dh
dafM+dk&2 es ;g lqfoosfpr izko/kku lekfo""V gS fd vO;og`r mikftZr NqV~Vh ds cnys es NqV~Vh osru ds lerqY; Hkqxrku dh tkus okyh uxn
jkf''k fufoZokfnr osru dh dksVh dk gh ,d Hkqxrku gSA bl dkj.k uxn jkf''k ls lacf/kr ljdkjh lsod ds ftEes ljdkj ds cdk;s dh ,d eq''r olwyh dh tk ldrh
gSSA bu izko/kkuks ls ;g Li""Vr% foof{kr �implied� gksrk gS fd ftl lsok&fuo`Rr deZpkjh ds fo:) fdlh Hkh rjg dh tkap py jgh gS] mlds ekeys
es olwyh lgt laHkkouk gS vkSj ;fn ,sls ekeys es tkWap vfUre fu""iknu ds iwoZ gh vO;og`r mikftZr NqV~Vh ds fy, NqV~Vh osru ds lerqY; uxn
jkf''k dk Hkqxrku dj fn;k tk;sxk rks tkWap ds QykQy ds vk/kkj ij olwyh djuk O;ogkfjd n`f""Vdks.k ls dfBu vo''; gksxk A bl mn~ns''; ls ;g
izko/kku Hkh fd;k x;k gS fd iwoZ es vfu.kZr ekeyks es Hkh ;g olwyh dh tk ldrh gSA blds ckotwn ;g eglwl tkrk gS fd dsfUnz; flfoy lsok;s
�NqV~Vh� fu;ekoyh ds fu;e&29�3� ds izko/kku ds leku jkT; ljdkj ds fu;e ds fLFkfr eq[kj ugh gSA
2- mi;ZDr lUnHkZ es v/kksgLrk{kjh dks iqu% ;g Li""V djus dk funsZ''k gqvk gS fd NqV~Vh Lohd`r djus ds fy, l{ke inkf/kdkjh Lofoosd ls
lEiw.kZ uxn jkf''k vFkok mlds ,d fuf''pr va''k ds Hkqxrku dks oSls ekeyks es jksd ldrs gS] ftles lsok&fuo`Rr deZpkjh ds fo:) lsok&fuo`fRr dh
frfFk rd fdlh Hkh rjg dh foHkkxh; dk;Zokgh] QkStnkjh eqdnek vFkok U;kf;d tkWp dk vfUre fu""iknu ugh gks ik;k gS vkSj ftl tkap ds QyLo:Ik es
olwyh dh {kh.k laHkkouk Hkh fo|eku gks A tkWap ds vfUre fu""iknu gksus ij jksds x;s Hkqxrku dks foeqDr dj fn;k tk;sxk] ijUrq tkWp ds ifj.kke
Lo:Ik ;fn dksbZ olwyh djus dk fu.kZ; gks rks oSlh olwyh djus ds ckn gh ''ks""k jkf''k foeqDr dh tk;sxh A
vuqjks/k gS fd bl Li""Vhdj.k ls vius v/khuLFk dk;Zy;ks dks Hkh voxr djk fn;k tk; �Kkikad&3@,Q&2&01@83@4564@fo0�2�- fnukad
6 tqykbZ] 1993�
English Translation of Circular of Finance Department.
Subject: Payment of Leave Encashment equivalent to unutilized Earned Leave on the date of Superannuation.
The undersigned is directed to state on the subject referred to above that the various departments desired to know as to whether the payments of
leave encashment in lieu of unutilized earned leave can be stopped in cases of those employees against whom departmental proceeding, criminal
case or judicial enquiry have not been concluded till the date of retirement or who have retired during suspension? In this context F.D. Memo
2150/F dated 19.7.84 clearly stipulates in para-2 that all payments of leave encashment equivalent to unutilized earned leave treated under the
category of admissible pay. Therefore, the Govt. dues can be recovered in one lump sum from the concerned employees out of the said payments.
From these provisions it is clearly implied that if the payments of leave encashment equivalent to unutilized earned leave is paid to those retired
employees against whome any proceeding is pending and there may be a possibility of recovery of certain dues then on conclusion of such
proceeding it may be practically difficult to recover the dues. With this view it has been provided that recovery can be made in all such cases
where the proceeding has not been concluded. In spite of these it is felt that the State Government''s Rules in this regard are not so explicit in
compare to Rule 29(3) of CCS (Leave) Rules.
2. In the above context the undersigned had been directed to clarify that the competent authority empowered to sanction leave on his discretion,
can withheld the payment of entire amount of leave encashment or part thereof, where the departmental proceeding, criminal case or judicial
enquiry has not been concluded against those retired government servants on their date of retirement and where as a result of conclusion of
proceedings a possibility of recovery exists. The entire withheld amount would be released on conclusion of the proceedings. But where it is
decided to recover any amount on conclusion of the proceedings then in such cases the balance amount would be released after adjusting the dues.
It is requested that this clarification should be made known to all concern. (Memo 3/F-2-01/93/4564/F dated 6.7.93)
27. The perusal of the above circular, which has been issued on 06.07.1993, it transpires that it is in the nature of executive instructions issued by
the Finance department. The said executive instruction contemplates the situation where there is some due against the retired government servant.
The State contemplates certain situation and condition under which certain dues could be recovered from the leave encashment. Therefore, the
executive instructions contemplates that the entire leave encashment should not be given to such government servant from whom some government
dues is recoverable. Therefore, the entire Leave Encashment should only be paid after completion of the inquiry. After the completion of the inquiry
the amount of due which can be quantified can be adjusted from the Leave Encashment and remaining amount can be paid.
28. The above executive instruction is not a law under Rule 300A of the Constitution of India. In the absence of any statutory rule, how can it be
claimed that the Leave Encashment can be withheld by the Government on the strength of the executive instructions?
29. The impugned order which has been passed against the pensioner-appellant under Rule 43(b) does not speak about any amount recoverable
from the petitioner and the amount has been withheld merely because of pendency of the criminal case. Admittedly, the circular, relied upon now
by the respondents, has not been quoted in the impugned order. Only Rule 43(b) is quoted. As such the executive instruction dated 06.07.1993
through a Circular issued by the Department cannot apply to the facts of this case.
30. According to the respondents, the circular has the force of law as it has been issued under Rule 5 of the Bihar Service Code. Rule 5 of the
Bihar Service Code provides thus:
5. No power under these rules may be exercised by the State Government except after consultation with Finance Department. It shall be open to
that department to prescribe by general or special order, cases in which its consent may be presumed to have been given, and to require that its
opinion on any matter on which it has been consulted shall be submitted to the Council of Ministers by the consulting department.
31. Perusal of the above Rule would make it clear that in exercising the powers under the provisions of Bihar Service Code, an executive
instruction can be issued with the consent of the Finance Department. Thus, it is clear that before issuance of any circular with the consent of the
Finance Department, the Government has to see whether it has power under statutory rule to issue such a circular. On the other hand, it is clear
that no rule provides any power to the State Government to withhold Leave Encashment so as to attract Rule 5.
32. In other words, if there is a power available under any other rule or law to withhold leave encashment, the same can be further governed by
executive instructions under Rule 5. Thus, Rule 5 of the Bihar Service Code does not help the respondents nor does it empowers the State to
withhold the Leave Encashment. As the circular was not issued under any powers conferred under the Rules, the Executive Instruction, which is a
guidelines cannot have the force of law.
33. It is held in Hindustan Times and Others Vs. State of U.P. and Another, ""the expression law within the meaning of Article 300A would mean a
Parliamentary Act or an Act of the State Legislature or a statutory order having the force of law. The State Government cannot while taking
recourse to the executive power of the State under Article 162, deprive a person of his property. Such power can be exercised only by authority
of law and not by a mere executive fiat or order.
34. In the light of the above ruling, we are to hold that the circular issued by the Finance Department has no force of law and as such would not
confer any power to withhold the leave encashment, which is termed as a property.
35. To sum up the answer for the two questions are as follows:
(i) Under Rule 43(a) and 43(b) of Bihar Pension Rules, there is no power for the Government to withhold Gratuity and Pension during the
pendency of the departmental proceeding or criminal proceeding. It does not give any power to withhold Leave Encashment at any stage either
prior to the proceeding or after conclusion of the proceeding.
(ii) The Circular, issued by the Finance Department, referring to the withholding of the leave encashment would not apply to the present facts of the
case as it has no sanctity of law.
Both the questions are answered accordingly.
36. Consequently, the order impugned and the order of learned Single Judge are quashed.
Narendra Nath Tiwari, J.
37. I agree.
D.P. Singh, J.
38. I agree.