B. Mohanakurup vs Registrar of Co-Operative Societies and State of Kerala

V. Giri, J.—A question of some recurrence, concerning the scope of Rule 3 of Part III KSR, (hereinafter referred to as the Rules) has been raised by the learned Counsel for the petitioner in the present case. He placed reliance on the judgment of the Full Bench of this Court in Xavier v. Kerala State Electricity Board 1979 KLT 80 and also another judgment of a learned single judge of this Court in Joseph v. State of Kerala 1994 (1) KLT 716 in support of his contentions. The above mentioned two judgments were not brought to the notice of another Full Bench of this Court in Raveendran Nair v. State of Kerala 2007 (1) KLT 605 The latter Full Bench has taken a view which is clearly inconsistent with the view taken by the learned judge in Joseph v. State of Kerala 1994 (1) KLT 716. The view taken in 1994 (1)KLT 716 also seems to be inconsistent with the view taken by the Division Bench of this Court in Jayarajan v. State of Kerala 2001(3) KLT 929 though Joseph does not seem to have been brought to the notice of the Division Bench in Jayarajan. In the circumstances, the parties have been heard at some length.

The petitioner, while working as Joint Registrar of Co- operative Societies, was suspended from service under Ext.P2 order passed by the Government on 4.4.2007. The order was issued by the Government and the suspension was one pending a detailed enquiry. The allegation in Ext.P2 is to the effect that the petitioner had conducted a house warming ceremony in a luxurious manner, which is in violation of the Conduct Rules of a Government servant. He had sent invitation letters to several Co-operative institutions in the District. A statement of assets which was submitted by him as a Government servant in terms of the Conduct Rules for the year 2005 revealed disclosure of nil assets and for all these reasons the Government expressed an opinion that a detailed enquiry is necessary.

The petitioner sought for revocation of suspension inter alia pointing out that he was due to retire on 31.12.2007. Apparently, taking note of this fact, the Government by Ext.P4 order dated 9.10.2007 directed reinstatement of the petitioner without prejudice to the on going enquiry. The enquiry is yet to be completed. In fact, according to the petitioner, even a memo of charges has not been served so far. The petitioner retired on 31.12.2007 and he has approached this Court seeking a direction to the respondents to close the disciplinary proceedings initiated against him on the basis of Ext.P2 (the original order passed by the government suspending him from service) and for a further direction to pay him the retirement benefits including pension, after regularising his suspension period without delay.

According to the petitioner, even if the allegations which are made mention of in Ext.P2, are taken as a whole, there is not even a whisper of any pecuniary loss that may be caused to the Government by the conduct of the petitioner and consequently the proceedings cannot be continued after the petitioner''s retirement. Withholding or withdrawing pension for recovery of any pecuniary loss that may be caused by the Government servant, as contemplated by Rule 3 of Part III of KSR alone could form the justification for continuing an enquiry which is initiated while the incumbent is in service. The prime motive of such enquiry must be the intention of recovering any loss that may be caused to the Government by the Government servant. The allegations taken as a whole do not in any manner even suggest the possibility of any pecuniary loss to the government by reason of any act or commission or omission on the part of the petitioner and continuance of the said proceedings, according to the learned Counsel for the petitioner, would be an abuse of process of law. Non disbursal of retirement benefits due to the petitioner is also therefore unjustified.

In the statement filed on behalf of the second respondent it is pointed out that the disciplinary proceedings shall be deemed to have commenced against the petitioner from the date of suspension viz. 4.4.2007 in terms of explanation (a) to Rule 3 of Part III KSR. The Government has taken a serious view of the allegations levelled against the petitioner. He has not disclosed the details of the newly constructed house in the annual statement submitted for the respective year. That a vigilance enquiry is ordered against the petitioner on 9.1.2008 and issues regarding the source of income of the petitioner for the construction of the house also come under the purview of the vigilance enquiry. In the circumstance there cannot be a disbursal of retirement benefits due to the petitioner at this stage.

The petitioner has filed a reply affidavit controverting the allegations in the statement filed by the second respondent.

I heard learned Counsel for the petitioner Sri.D. Somasundaram and learned senior Government Pleader Sri. Nandakumar.

The short question which has been posed for consideration is whether the petitioner is entitled to a direction to the respondents to close the disciplinary enquiry initiated against the petitioner as contemplated by Ext.P2 order of suspension on the premise that the allegations even taken as a whole do not suggest that any loss whatever has been caused to the Government by the petitioner thereby obviating the necessity of any recovery being effected by the Government from the petitioner.Rule 3 Part III of KSR is extracted hereunder:

The Government reserve to themselves 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 in a departmental or judicial proceeding, the pensioner is found guilty of grave misconduct or negligence during the period of his service including service rendered upon reemployment after retirement.

It would be profitable to understand the rule on a plain reading of the same. I think it would be appropriate to consider the decisions cited by either side after one considers the purport of the rule as it reads. The conduct of departmental proceedings against a Government servant is essentially governed by Kerala Civil Services (Classification, Control and Appeal) Rules and therefore grave "misconduct" or "negligence" during the period of his service would obviously be found as a fact only in a departmental or judicial proceedings. Institution of departmental proceedings and continuance of the same and its logical conclusion as part of the normal disciplinary control exercised by the Government is regulated by the rules which were originally sourced to the proviso to Article 309 of the Constitution and later deemed as statutory rules under the Public Services Act. Thus the power to initiate disciplinary action and continue the same as also the power to impose suitable punishment on the Government servant is essentially regulated by the provisions of the KCS (CCA) Rules 1960. Rule 3 of Part III KSR also refers to departmental or judicial proceedings and the possibility of a "pensioner" being found guilty of grave misconduct or negligence during the period of service. Taking note of the fact that Rule 3 of Part III of KSR is a provision which is found in a chapter titled "pension" and therefore deals with the right of a Government servant to receive pension and the liberty available with the Government as such to withhold or withdraw pension, permanently or for a specified period, it follows as a logical consequence that Rule 3 must be construed as conferring a power on the Government to withhold or withdraw a pension or any part of it, if the Government servant is guilty of misconduct or negligence in departmental or judicial proceedings, as a right to be exercised over and above the right to impose a suitable punishment which otherwise the Government as the ultimate employer of the Government servant obviously possesses.

The right to impose such punishment consequent upon the finding of grave misconduct or negligence during the period of service is part of the disciplinary control exercised by the Government and where therefore the rule making authority has declared a right being available to the Government to withhold or withdraw pension or any part of it, it obviously reflects the intention of the rule making authority to treat the right to withhold or withdraw pension consequent upon a finding of misconduct or negligence of a Government servant either in a departmental or judicial proceedings as independent of the right available to the Government as an employer regulated as it were, by the provisions of the KCS (CCA) Rules.

Rule 3 of part III of KSR also refers to the right of the Government to order recovery from the pension of an employee provided pecuniary loss has been caused to the Government by the Government servant. Of course, if loss has been caused to the Government by the Government servant, the Government would be entitled to take such steps as are necessary to recompense itself of any loss that may be caused to the Government. Under the proviso (a) to Rule 3, a departmental proceeding which is instituted while the employee is in service is deemed to be a proceeding for the purpose of Rule 3 even after retirement. The fiction is extended to its logical conclusion, by making it clear that "it shall be continued and concluded by the authority by which it was commenced in the same manner as if the employee had continued in service". In other words, departmental proceedings which are instituted against the Government servant while he is in service do not get abated statutorily by the retirement of the Government servant.

The explanation to rule 3 refers to the date on which the statement of charges is issued to the employee or pensioner as the date of institution of the departmental proceedings for the purpose of the rule. Apart from the above, if an employee has been placed under suspension, prior to the date of issuance of charges against him, then the date of suspension is the crucial date in so far as the institution of the departmental proceedings are concerned.

Learned Counsel for the petitioner Sri.Somasundaram submits that Rule 3 of part III KSR is only intended to enable the Government to recompense itself of any loss that may have been caused to the Government and makes available the pension for recovery of such loss. He contends that if the charges do not even contain a whisper of any pecuniary loss that may have been caused to the Government as such by the conduct of the Government servant, the proceedings cannot be continued beyond retirement. He submits that there is a cessation of the employer employee relationship on the retirement of the Government servant and if by a fiction Rule 3 contemplates continuance of the enquiry beyond retirement, it must be for the limited extent of enabling the Government to recompense itself of any loss that may be caused by the Government servant as such.

Mr. Somasundaram refers to the judgment of the Full Bench in 1979 KLT 80 and the judgment of the learned Single judge 1994(1) KLT 716 in support of his contentions.

Learned senior Government Pleader Sri.Nandakumar on the other hand submits that the power of the Government to initiate departmental proceedings against the Government servant is not as such regulated by the provisions of the KSR. That being a part of the disciplinary control exercised by the Government independently, is regulated by the provisions of the constitution and the statutory rules originally sourced to the proviso to Article 311(2) of the Constitution. There is no warrant to limit the application of Rule 3 to cases which involves a pecuniary loss being caused by the Government servant and the right exercised by the Government to recover such loss. Mr. Nandakumar submits that the position is no longer in any doubt by reason of the full bench in Raveendran Nair.

The Full Bench in 1979 KLT 80, no doubt specifically referred to rule 3 Part III of KSR. (full bench held as follows):

The Rule does not authorise the continuance of disciplinary proceedings as such, against a Government servant after his retirement. Both on principle and on authority, such a position cannot be easily countenanced. It allows only a limited type of enquiry to be proceeded with, namely an enquiry in regard to withholding or withdrawing pension, or of ordering recovery from pension by reason of any misconduct or negligence during the period in service of the employee. Under Clause (a) of the proviso to the Rule, the departmental proceeding, if instituted during the service of the employee is to be deemed to be a proceeding under the Rule and may be continued and completed even after his retirement. To this limited extent alone is provision made under the rule for continuance of a disciplinary enquiry beyond retirement. That too is by transmuting it by fiction to be an enquiry under the Rule. Beyond this, we cannot understand the rule as in any way permitting the authorities either to launch or to continue disciplinary proceedings after the retirement of the employee.

The Full Bench while holding that the rule does not authorise the continuance of disciplinary proceedings as such against a Government servant after his retirement, nevertheless made it clear that it allows a limited type of enquiry viz. enquiry with a view to withhold or withdraw pension or for ordering recovery from pension by reason of any misconduct or negligence during the period in service. In other words, according to the full bench, rule 3 of Part III of KSR essentially contemplates continuance of the departmental enquiry beyond the period of retirement of the Government servant for the limited purpose as provided in the rule itself.

Sri.Somasundaram submits that Xavier was treated as an authority for the purpose of holding that no disciplinary enquiry can be continued after retirement except where there are allegations of pecuniary loss being caused by the Government servant which could be recovered by the Government from the pension the Government servant is entitled to. He contends that where therefore, the Government itself does not have a case of any pecuniary loss being suffered by it by reason of any misconduct on the part of the Government servant, departmental proceedings cannot be continued beyond retirement for the purpose of rule 3 of part III KSR. He submits that in such circumstances, there would be no justification for withholding the retirement benefits due to the petitioner. I am unable to accept this submission. Xavier, while mentioning about the cessation of disciplinary control over the Government servant by reason of his retirement, expressly referred to the continuance of a limited type of enquiry, viz. an enquiry in regard to withholding or withdrawing pension or ordering recovery from pension or for ordering recovery from pension. The Full bench did not in any manner either hold or suggest cessation or abatement of the disciplinary proceedings except where the subject matter of such enquiry is the alleged pecuniary loss caused to the Government by the Government servant in question. No such sweeping declaration has been made by the Full Bench in Xavier.

Mr. Somasundaram then referred to the judgment of the learned Single Judge in 1994 (1)KLT 716) wherein a learned Judge of this Court referred to Xavier and also referred to two other judgment of this Court in Kolappa pillai v. State of Kerala 1982 KLT 551 and George v. Tahsildar,Cochin 1992 (2)KLT 919. Joseph, no doubt, specifically held both as a matter of subscribing to the view in Kolappa Pillai and George and as a view taken by the learned judge independently, that the acts of commission or omission against the Government servant should specifically relate to any loss that may have been caused to the Government by the latter. That if there are no such allegations that could possibly lead to a finding of loss being caused to the Government by the Government servant, there would be no justification for continuing the departmental enquiry under rule 3 of Part III KSR. The learned Judge in Joseph came to the conclusion essentially on the premise that the proceedings under Rule 3 of Part III KSR are initiated only to enable the Government to recompense itself of any loss that may have been caused by the Government servant while he was in service.

But the view in Joseph, Kolappa Pillai and George cannot be held to be good law any longer in the light of the view taken by the Division Bench of this Court in Jayarajan v. State of Kerala reported in 2001(3) KLT 929 the Division bench held as follows:

We are inclined to accept the contention of the appellant that after his retirement, it is not permissible to proceed against him under Rule 15 for the purpose of imposing a major penalty, but we are of the view that the proceedings can be continued against him under Rule 3 of part III KSR. The contention of the appellant that the charges levelled against him do not disclose allegations of cause of monetary loss to the Government appears to be not correct. The appellant who is to be a vigilant sentinel guarding the checkpost was found lying unconscious in a drunken state. Therefore, at the relevant time the smugglers could have merrily carried on their activities unhindered by anyone. The same would definitely cause loss of revenue to the State. Therefore, the contention that his misconduct did not result in loss of revenue to the State cannot be accepted. Further, the power under Rule 3 for reducing pension can be exercised even in the absence of allegation of pecuniary loss to the Government. A close scrutiny of the Rule would show that the Government reserve to themselves two rights:

(1) the right to withhold or withdraw a pension or any part of it whether permanently or for a short period;

(2) the right to order recovery from pension of the whole or any part of the pecuniary loss caused to the Government. These two rights are distinct and separate. The first right could be exercised even in the absence of any pecuniary loss to the Government.

Thus the right of the Government under Rule 3 of part III KSR to withhold or withdraw pension, could be exercised even in the absence of any pecuniary loss to the Government. Jayarajan specifically refers to 1979 KLT 80 (Full bench). The bench held that the view cannot be taken as laying down the correct position of law, in the light of the interpretation given by the Supreme court in Union of India and Others Vs. Shri B. Dev, construing Rule 9 of the CCS (Pension) Rules which is in pari materia with rule 3 of part III KSR. The view taken by the Division Bench in Jayarajan was specifically affirmed by the Full Bench in Raveendran Nair v. State of Kerala reported in 2007(1) KLT 605. The reason for taking such a view was also given by the bench, as follows:

We also perceive another object in this rule. This rule helps to discourage government servants from committing misconducts on the eve of their retirement. Without this rule any government servant can with impunity indulge in misconducts with the sanguine belief that once they retire from service, the Government would be powerless to take action against them and they can get away with the misconduct. If the interpretation that the right under R.3 can be exercised only in case of pecuniary loss is accepted, that would encourage unscrupulous employees to commit misconducts at least those which would not involve pecuniary loss to the Government. This rule, as interpreted in the way we have done would certainly help to put such unscrupulous employees on guard against committing misconducts on the eve of retirement. Our interpretation of the rule would, therefore, be in tune with such an object which certainly is a laudable one for maintaining discipline among government employees.

In the light of the authoritative pronouncement of the Division Bench in Jayarajan, which has been specifically referred to and affirmed in Raveendran Nair, the view taken by this Court in Kolappa Pillai, George and Joseph interpreting rule 3 part III KSR as enabling the Government to continue the disciplinary proceedings against the Government servant beyond retirement only for the purpose of recovering any pecuniary loss that may have been caused to the Government by the Government servant cannot be treated as a good law. With great respect, Kolappa Pillai, George and Joseph should be treated as having been impliedly over ruled by the Full bench in Raveendran Nair.

For all these reasons, I am of the view that the petitioner is not entitled to seek a direction to the respondents to close the disciplinary action initiated against him as evidenced by Ext.P2 on the ground that the allegations do not disclose any pecuniary loss having been caused by the petitioner to the Government. Rule 3 of Part III KSR has application only in the context of the right of the Government servant to draw pension on retirement. The right of the Government to withhold or withdraw pension due to the Government servant either permanently or for a specified period is not dependant on the presence of an allegation of any act of omission or commission on the part of the Government servant for the continuance of the departmental proceedings initiated against him, in the context of Rule 3 of Part III KSR. I, therefore do not find any reason to issue any direction as such to the Government to close the enquiry initiated against the petitioner.

I also take note of the contention in the statement filed by the second respondent that the Government has also ordered vigilance enquiry against the petitioner. Some delay in the disbursal of the retirement benefits due to the petitioner is therefore inevitable. I do not therefore find any grounds to issue a mandamus (at this stage) to the respondents to disburse the benefits due to the petitioner ignoring the pendency of the departmental enquiry and the possibility of an enquiry before the vigilance court. The right to receive the DCRG, Commuted value of pension and the full pension is governed by the provisions in the KSR. I do not think it appropriate to issue a mandamus at this stage either to disburse the DCRG or full pension to the petitioner.

But it is incumbent on the part of the respondents to pass orders as regards provisional pension payable to the petitioner. The second respondent shall do the same within one month from the date of receipt of a copy of this judgment. I do not find any merit in the writ petition and accordingly the same is dismissed subject to the direction to the second respondent to pass orders as regards the provisional pension payable to the petitioner.