State of Kerala represented by its Principal Secretary, Water Resources (A) Department, Government Secretariat, Thiruvananthapuram v. Kerala Lok Ayukta and C. Muraleedharan Chief Engineer (Retd)

# IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR & THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN TUESDAY, THE 28[TH] DAY OF MARCH 2023 / 7TH CHAITHRA, 1945 ## WP(C) NO. 14379 OF 2019 ## PETITIONERS: - 1 STATE OF KERALA REPRESENTED BY ITS PRINCIPAL SECRETARY, WATER RESOURCES (A) DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. - 2 THE PRINCIPAL SECRETARY TO GOVERNMENT FINANCE (PENSION-A) DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. - 3 THE CHIEF ENGINEER, IRRIGATION & ADMINISTRATION IRRIGATION DEPARTMENT, THIRUVANANTHAPURAM. BY ADV. SRI.TEKCHAND.V, SR.GOVERNMENT PLEADER ## RESPONDENTS: - 1 THE KERALA LOK AYUKTA, OFFICE OF THE LOK AYUKTA, THIRUVANANTHAPURAM-695033. 2 C.MURALEEDHARAN CHIEF ENGINEER (RETD), ATHIRA, EARUM NORTH, CHATHANNOOR P.O., KOLLAM. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 28.03.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 14379 OF 2019 :: 2 :: ## JUDGMENT ## Dated this the 28[th] day of March 2023 ## S.MANIKUMAR, C.J. The petitioners are aggrieved by Ext.P5 interim order, dated 13.04.2018, passed by the first respondent - Kerala Lok Ayukta, in Complaint No.1343 of 2010, directing payment of penal interest to the tune of Rs.4,30,243/- being the interest on total pensionary benefits of the second respondent @ 6% per annum for the period from 31.03.2003 to 28.02.2014, finding that there is no justifiable reason for delay in payment of pensionary benefits. 2. It is submitted by the State of Kerala, represented by its Principal Secretary to the Government, Water Resources Department and another - petitioners that the second respondent – Mr.C.Muraleedharan filed Complaint No.1343 of 2010 before the first respondent - Lok Ayukta complaining that there is inordinate delay in disbursing the pensionary benefit. Though the second respondent was retired as early as on 30.11.2002, the pensionary WP(C) NO. 14379 OF 2019 :: 3 :: benefit has not been disbursed till the filing of the complaint. The second petitioner – the Principal Secretary to the Government has filed a statement and detailed the reasons for non-payment of pensionary benefits. It is stated in the statement that there is a criminal case pending against the second respondent, which was terminated only on 31.10.2013. 3. As per Rule 3(A) Part III of KSR, the pensionary benefits in full can be disbursed only after the finalization of the proceedings. According to the petitioners, the first respondent Lok Ayukta without considering the facts and circumstances in its correct perspective passed Exhibit P5 order directing payment of interest, finding that the authorities are responsible for the delay. Therefore, petitioners contend that Exhibit P5 order passed by the first respondent is illegal and against the provisions of Kerala Lok Ayukta Act and against the law laid down by the Division Bench of this Court in State of Kerala and another Vs. R. Muralidharan Nair (2015 (3) KLT 755). 4. Being aggrieved by the above, petitioners approached this court seeking for the following reliefs: WP(C) NO. 14379 OF 2019 :: 4 :: - “i. Quash issue a writ of certiorari or appropriate writ or order quashing Exhibit P5 order passed by the first respondent. - ii. Declare that the second respondent is not entitled to get interest on the pensionary benefits. - iii. Declare that there is no mal-administration on the part of the petitioners in disbursing the pensionary benefits to the second respondent.” ## 5. Grounds on the basis of which instant writ petition ## is filed are as hereunder: “The first respondent ought to have found that it was only on account of the statutory provisions contained in Rule 3(A) Part III KSR that the pensionary claim of the second respondent could not be settled during the pendency of the judicial proceedings. It is revealed from the record that there was a vigilance case pending against the second respondent as CC No.40/2004 before the Enquiry Commissioner and Special Judge, Thiruvananthapuram till 31.10.2013 on which date, the Vigilance Court pronounced the judgment acquitting the accused in the case. Therefore, in spite of the fact that the Government has accorded sanction for payment of pensionary benefits to the second respondent as per Government Order dated 01.04.2011, the NLC could not be issued and the claim could not be settled during the pendency of the proceedings. It is pertinent to note that immediately on getting report from the Vigilance Department as to the termination of the judicial proceedings, NLC was issued on 06.02.2014 itself and the same was forwarded to the office of the Chief Engineer on the same date itself. It is also to be noted that the WP(C) NO. 14379 OF 2019 :: 5 :: pensionary benefits were disbursed on the very same month of issuance of NLC itself i.e on 28.02.2014. Therefore it is crystal clear that there was absolutely no delay on the part of the authorities in disbursing the pensionary benefits to the second respondent. It was only on account of the operation of law that the pensionary benefit could not be disbursed till 2014 to the second respondent. Exhibit P5 order is illegal as it gives a positive direction to the authorities to grant interest on delayed payment. As per Section 12 of the Act, the first respondent can only make a report in writing to the competent authority concerned to remedy the injustice. Exhibit P5 does not satisfy the requirement of Section 12 and therefore Exhibit P5 cannot stand in the eye of law. The first respondent failed in considering the entire facts and the contentions raised by the petitioner in its right perspective. Merely for the reason that there was delay in disbursing the pensionary benefits, there is no justifiable reason for directing payment of interest in the absence of the cogent material to prove that there is culpable delay amounting to mal-administration on the part of the authorities.” 6. On the facts and above grounds, Mr.Tek Chand. V, learned Senior Government Pleader submitted that the issue involved in this writ petition is squarely covered by the decision of the Hon’ble Supreme Court in Secretary, Local Self Government Department and others etc. v. K. Chandran etc. reported in 2022 (2) KHC 523 wherein, the WP(C) NO. 14379 OF 2019 :: 6 :: Hon'ble Supreme Court has held that DCRG benefits shall not be released pending consideration of the disciplinary proceedings. 7. Relevant portion of the said judgment reads thus: “33. R.1 to Part III of the KSR begins with the entitlement of pension of all employees to whom the service rules apply. R.2 stipulates that future good conduct shall be an implied condition of every grant of a pension and there is entitlement to withhold or withdraw a pension or part thereof whether permanently or for a specified period. In terms of R.2(b), where a pensioner is convicted of a serious crime by a Court of law, action under clause (a) shall be taken in the light of the judgment of the Court relating to such conviction. In the facts of the case it can hardly be said that the conviction on the ground of corruption would not be classified as a serious crime for a person holding a public post. In terms of clause (c) of R.2, in case of prima facie guilt of grave misconduct, a procedure has been prescribed to be followed, which includes as per clause (d) of R.2 consultation with the Public Service Commission. It is after the aforesaid Rules that R.3 commences where the Government reserves to themselves the right to withhold or withdraw a pension or any part of it, whether permanently or for a specified period, and all its ramifications. Certain protective provisions have been made even in that eventuality. This provision is applicable to pension is clarified by Note 2, as it is stipulated that the word 'pension' would not include DCRG. Thus, DCRG and pension have been dealt with as separate aspects. The three Notes are followed then by Rulings 1, 2, & 3. 34. However, Note 2 provides that the liabilities fixed against an employee or a WP(C) NO. 14379 OF 2019 :: 7 :: pensioner can be recovered from DCRG without the departmental / judicial proceedings referred to in this Rule but after giving an employee or pensioner concerned a reasonable opportunity to explain. If any part of DCRG was not supposed to be available for recovery of amounts, there would be no reason of inclusion of this aspect of DCRG in Note 2 and a view to the contrary would make the latter part of Note 2 otiose. 35. The aforesaid Note 2 is further clarified by Ruling No. 3, which stipulates that Note 2 does not mean that the employee's or pensioner's consent should be obtained for recovering the liabilities from DCRG. What has been contemplated is only a communication of such liabilities to him so as to enable him to submit his explanation. Thus, this Ruling No.3 also deals with the DCRG. It is thereafter that R.3A starts which refers to the grant of provisional pension not exceeding the maximum pension which would have been admissible on retirement where departmental or judicial proceedings have been initiated under R.3. It is clearly stipulated that no gratuity or DCRG shall be paid to him until the conclusion of such proceedings and the issuance of final order thereof. 36. The High Court, in our view, has introduced a new legislation by undertaking the exercise of reading down. We do believe that there is absolutely no need to do so when the language of the rule is so clear conveying its intended meaning without any ambiguity. 37. We are, thus, of the view that R.3A cannot be read in isolation nor the latter part of it struck down as done by the High Court. R.3, Note 2, Ruling 3, and R.3A have to be read in conjunction as they provide for the treatment of the DCRG in case of disciplinary or judicial proceedings pending at the stage of retirement. Even in the absence of these proceedings in WP(C) NO. 14379 OF 2019 :: 8 :: certain eventualities the amounts can be recovered from the DCRG. 38. We are of the view that the principle as enunciated in Chairman - cum - Managing Director, Mahanadi Coalfields (supra) would apply even though it is in the context of a different set of Rules. It would be suffice to reproduce paragraphs 11 & 11.2 and 46 & 47 of the said judgment as under: "11. Once it is held that a major penalty which includes the dismissal from service can be imposed, even after the employee has attained the age of superannuation and / or was permitted to retire on attaining the age of superannuation, provided the disciplinary proceedings were initiated while the employee was in service, subS.6 of S.4 of the Payment of Gratuity Act shall be attracted and the amount of gratuity can be withheld till the disciplinary proceedings are concluded." ## xxxx xxxx xxxx "11.2. It is required to be noted that in the present case the disciplinary proceedings were initiated against the respondent employee for very serious allegations of misconduct alleging dishonestly causing coal stock shortages amounting to Rs.31.65 crores and thereby causing substantial loss to the employer. Therefore, if such a charge is proved and punishment of dismissal is given thereon, the provisions of subS.6 of S.4 of the Payment of Gratuity Act would be attracted and it would be within the discretion of the appellant - employer to forfeit the gratuity payable to the respondent. Therefore, the appellant - employer has a right to withhold the payment of gratuity during the pendency of the disciplinary proceedings." ## xxxx xxxx xxxx "46. Several service benefits would depend upon the outcome of the inquiry, such as concerning the period during which inquiry remained pending. It would be against the WP(C) NO. 14379 OF 2019 :: 9 :: public policy to permit an employee to go scotfree after collecting various service benefits to which he would not be entitled, and the event of superannuation cannot come to his rescue and would amount to condonation of guilt. Because of the legal fiction provided under the rules, it can be completed in the same manner as if the employee had remained in service after superannuation, and appropriate punishment can be imposed. Various provisions of the Gratuity Act discussed above do not come in the way of departmental inquiry and as provided in S.4(6) and R.34.3 in case of dismissal gratuity can be forfeited wholly or partially, and the loss can also be recovered. An inquiry can be continued as provided under the relevant service rules as it is not provided in the Payment of Gratuity Act, 1972 that inquiry shall come to an end as soon as the employee attains the age of superannuation. We reiterate that the Act does not deal with the matter of disciplinary inquiry, it contemplates recovery from or forfeiture of gratuity wholly or partially as per misconduct committed and does not deal with punishments to be imposed and does not supersede the R.34.2 and 34.3 of the CDA Rules. The mandate of S.4(6) of recovery of loss provided under S.4(6)(a) and forfeiture of gratuity wholly or partially under S.4(6)(b) is furthered by the R.34.2 and 34.3. If there cannot be any dismissal after superannuation, intendment of the provisions of S.4(6) would be defeated. The provisions of S.4(1) and S.4(6) of Payment of Gratuity Act, 1972 have to be given purposive interpretation, and no way interdict holding of the departmental inquiry and punishment to be imposed is not the subject matter dealt with under the Act. 47. Thus considering the provisions of R.34.2 and 34.3 of the CDA Rules, the inquiry can be continued given the deeming fiction in the same manner as if the employee had continued in service and appropriate WP(C) NO. 14379 OF 2019 :: 10 :: punishment, including that of dismissal can be imposed apart from the forfeiture of the gratuity wholly or partially including the recovery of the pecuniary loss as the case may be." 39. We also believe that it is a very restrictive view to disburse DCRG on account of the proceedings against a pensioner coming to an end, even where a conviction has arisen. This is especially so where the convicted person has availed of the remedy of appeal. An appeal is a continuation of the proceedings in trial and would be, thus, a continuation of judicial proceedings. For example, if no appeal had been filed, can it be said that despite conviction in the criminal case, the State is without authority of forfeiting the DCRG or pension for that matter? If it is not so, as we believe, then the pendency of the appeal cannot disentitle the State from withholding the DCRG, considering that it is a hiatus period within which certain arrangements have to be made which would be dependent on the outcome of the appeal. 40. Learned counsel for the respondent did seek to contend before us that if the appeals are pending over a long period of time it should not prejudice the respondents. That is a matter for them to take up before the High Court for disposal of the appeals, which are undoubtedly quite old. 41. We have aforesaid also clarified that there is no question of any other departmental proceedings arising independently against the respondents, as the conclusion of the criminal proceedings would entitle the State to pass appropriate orders based solely on the result of the aforesaid proceedings. 42. Conclusion: We are, thus, of the view that the impugned judgment of the Full Bench of WP(C) NO. 14379 OF 2019 :: 11 :: the Kerala High Court cannot be sustained, and it cannot be opined that the DCRG would have to be released to the respondents pending consideration of the criminal appeal. 43. The impugned judgment is set aside and the appeals are accordingly allowed leaving the parties to bear their own costs.” ## 8. Rule 3 of Appendix X of Part III KSR reads thus: “3. An Officer shall be entitled, subject to the conditions hereinafter specified to commute for a lump payment any portion not exceeding one third of any pension which has been, or may be granted to him under rules, provided however, that the uncommuted residue of pension shall not be less than Rs.240 per annum. Provided further that an officer against whom judicial proceeding has been instituted or a pensioner against whom any such proceeding has been instituted or continued under Rule 3 of Part III, shall not be permitted to continue any part of his pension during the pendency of such proceeding.” ## 9. Rule 3 of Part III of KSR reads thus: “3. The Government reserve to themselves the right of withholding or withholding 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 re-employment after retirement.” WP(C) NO. 14379 OF 2019 :: 12 :: 10. The said provisions which we considered make it clear that during the pendency of a departmental or judicial proceeding, commutation of any part of pension is not permissible. 11. Relying on the decision in Secretary, Local Self Government Department and others etc. v. K. Chandran , this court allowed similar writ petition by judgment dated 27.7.2022 in W.P.(C)No.35060/2022. 12. Giving due consideration to the statutory provisions and in particular Rule 3 under Appendix X of Part III of KSR (Pension and Commutation Rules), Rule 3 of Part III of KSR, grounds raised and the decisions stated supra, we are of the view that the petitioners have made out a case for interference with Ext.P5 interim order dated 13.04.2018 passed by the first respondent - Kerala Lok Ayukta, in Complaint No.1343 of 2010. In the light of the above, we have no hesitation to hold that Ext.P5 WP(C) NO. 14379 OF 2019 :: 13 :: interim order dated 13.04.2018 passed by the first respondent - Kerala Lok Ayukta, in Complaint No.1343 of 2010 is contrary to the statutory provisions, as well as the decision of the Hon’ble Apex court cited supra. Hence, Ext.P5 order dated 13.04.2018 passed by the first respondent - Kerala Lok Ayukta in Complaint No.1343 of 2010 is liable to be set aside. Accordingly, we do so. Writ petition is allowed. sd/S.MANIKUMAR CHIEF JUSTICE sd/MURALI PURUSHOTHAMAN JUDGE jes WP(C) NO. 14379 OF 2019 :: 14 :: ## APPENDIX ## PETITIONER’S EXHIBITS: EXT.P1: TRUE COPY OF THE COMPLAINT NO.1343/2010 C (WITH EXHIBITS PRODUCED) FILED BEFORE THE HON’BLE LOK AYUKTA, KERALA. EXT.P2: TRUE COPY OF THE STATEMENT (WITH EXHIBITS) FILED BEFORE THE FIRST RESPONDENT IN RESPONSE TO THE EXHIBIT P1 COMPLAINT. EXT.P3: TRUE COPY OF G.O.(P)NO.803/02/FIN. DATED 30.12.2002. EXT.P4: TRUE COPY OF THE ORDER DATED 9.11.2012 IN COMPLAINT NO.1343/2010 C PASSED BY THE FIRST RESPONDENT. EXT.P5: TRUE COPY OF THE ORDER DATED 13.4.2018 IN COMPLAINT NO.1343/2010 C WAS PASSED BY THE FIRST RESPONDENT. // TRUE COPY // ## P.S. TO JUDGE